Accounting adjustments: Accounting adjustments can be called as the crucial step towards presenting the true and fair financial position of the companny. It involves performing adjustments in the accounting journals of the period. The adjustments are generally of accrued revenue, unearned revenue and prepaid expense, so as to record the revenues and expenses in the accounting period in which they have been incurred. To Classify: The given adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues ( AR ).

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Trial Balance Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock Operating Expenses (1) 40,000 (4) 6,175 (8) 2,200

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Chapter 3, Problem 3QS

To determine

Concept Introduction:

Accounting adjustments: Accounting adjustments can be called as the crucial step towards presenting the true and fair financial position of the companny. It involves performing adjustments in the accounting journals of the period. The adjustments are generally of accrued revenue, unearned revenue and prepaid expense, so as to record the revenues and expenses in the accounting period in which they have been incurred.

To Classify: The given adjusting entries as involving prepaid expenses (PE), unearned revenues (UR), accrued expenses (AE), or accrued revenues (AR).

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Trial Balance Rocky Mountain Tours Co. is a travel agency. The nine transactions recorded by Rocky Mountain Tours during June 20Y2, its first month of operations, are indicated in the following T accounts: Cash (1) 40,000 (2) 4,000 (7) 13,100 (3) 5,000 (4) 6,175 (6) 6,000 (9) 1,500 Equipment (3) 15,000 Dividends (9) 1,500 Accounts Receivable Accounts Payable Service Revenue (5) 20,500 (7) 13,100 (6) 6,000 (3) 10,000 (5) 20,500 Supplies (2) 4,000 (8) 2,200 Common Stock Operating Expenses (1) 40,000 (4) 6,175 (8) 2,200

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