Accounts requiring adjustment

Question

Indicate with a Yes or No whether or not each of the following accounts normally requires an adjusting entry:

Accounts Yes or No
a. Building
b. Cash
c. Common Stock
d. Land
e. Prepaid Rent
f. Wages Expense

Answer 1

Here are the indications of whether each account normally requires an adjusting entry:

Accounts | Yes or No ------------------------|---------- a. Building | No b. Cash | No c. Common Stock | No d. Land | No e. Prepaid Rent | Yes f. Wages Expense | Yes

Explanation:

• Building, Cash, Common Stock, Land: These accounts typically do not require adjusting entries because they are not associated with accrued or deferred items. Their balances are usually updated only when there is a transaction.

• Prepaid Rent: This account usually requires an adjusting entry to recognize the portion of rent expense that has been incurred during the accounting period.

• Wages Expense: This account typically requires an adjusting entry to account for wages that have been incurred but not yet paid by the end of the accounting period.