Question

For the year ending December 31, Orion, Inc. mistakenly omitted adjusting entries for $1,500 of supplies that were used, (2) unearned revenue of $4,200 that was earned, and (3) insurance of $5,000 that expired. For the year ending December 31, what is the effect of these errors on revenues, expenses, and net income?

Answer 1

Answer:

revenue     4200+

Expenses   1500-

                   5000-

Net income 2300-

Explanation:

Supllies                 1500 Increase expenses reduce net income

unearned revenue 4200 Increase revenue         increase net income

Insurance        5000 Increase expenses reduce net income