8. In the space below, state whether each situation is a deferral or an accrual.

Part A:

______ a. Unrecorded interest that has been earned on savings bonds is $765.

______ b. Property taxes that have been incurred but that have not yet been paid or

recorded amount to $1,034.

______ c. Legal fees of $2,890 were collected in advance. By year end, 70 percent

were still unearned.

______ d. Prepaid Insurance had a $900 balance prior to adjustment. By year end,

25 percent was still unexpired.

______ e. Unpaid salaries earned by year end but not yet paid or recorded amounted

to $1,655.

______ f. Services totaling $690 have been performed but not yet recorded or billed.

Part B:

______ a. Depreciation on machinery is $7,200 for the accounting period.

______ b. Interest that has been incurred on a loan but that has not yet been

paid or recorded is $675.

______ c. Office supplies of $965 were on hand at the beginning of the period.

Purchases of office supplies during the period totaled $640. At the

end of the period, $120 in office supplies remained.

______ d. Commissions amounting to $975 were earned but not yet collected

by year end.

______ e. Prepaid Rent had a $2,500 balance prior to adjustment. By year end,

50 percent had expired.

______ f. Federal income taxes for the year were estimated to be $4,680.

9. For each of the following oversights, state whether total assets will be understated, overstated, or not affected.

______ a. Failure to record revenue earned but not yet received

______ b. Failure to record expired rent

______ c. Failure to record accrued interest income in the bank

______ d. Failure to record depreciation

______ e. Failure to record accrued wages

______ f. Failure to convert unearned revenue to earned revenue