Exercises to complete:

EX 3-1 Classifying types of adjustments

classify the following items as (a)prepaid expenses, (b) unearned revenue,(c) accrued revenue, (d) accrued expenses.

1 A three -year premium paid on a fire insurance policy

2 Fees earned but not yet received.

3 Fees received but not yet earned.

4 Salary owed but not yet paid.

5 Subscriptions received in advanced by a magazine publisher.

6 Supplies on hand.

7 Taxes owed but payable in the following period.

8 Utilities owed but not yet paid.

EX 3-2 Classifying adjusting entries

The following accounts were taken from the unadjusted trial balance of Orion Co. a congressional lobbying firm. Whether or not each account would normally require an adjusting entry. If the account normally requires an adjusting entry indicate the type of adjustment, use the following notation to indicate the type of adjustment:

AE - Accrued expense

AR- Accrued Revenue

PE- Prepaid Expense

UR- Unearned

Accounts Receivable:Normally requires adjustment (AR).

Cash

Common Stock

Interest Expense

Interest Receivable

Land

Office Equipment

Prepaid Rent

Supplies

Unearned Fees

Wages Expense