Which of the following does not require an adjusting entry at year-end?
A)Accrued interest on notes payable.
B)Supplies used during the period.
C)Cash invested by stockholder.
D)Accrued wages.
E)Expired portion of prepaid insurance.

Question

Quizplus · Accepted Answer

Cash invested by stockholder is not an expense or revenue transaction, and therefore does not require an adjusting entry at year-end. Adjusting entries are required for transactions that have occurred but have not been recorded in the accounts or have been recorded but not yet adjusted to reflect the correct amounts as of the end of the accounting period. Accrued interest on notes payable, accrued wages, and expired portion of prepaid insurance are examples of transactions that require adjusting entries to properly record and report them in the financial statements. Supplies used during the period is also an example of a transaction that requires an adjusting entry to reflect the amount of supplies that have been used up and to adjust the balance of the supplies account accordingly.

Which of the Following Does Not Require an Adjusting Entry