Perez Company was founded in 2012 and engaged in the following transactions:
1.issued common stock for cash
2.purchased supplies on account
3.collected cash from a customer for services to be provided over a period of 1 year
4.paid a cash dividend to stockholders
5.purchased a 2-year fire insurance policy
6.provided services to customers on account
7.collected cash from accounts receivable
8.paid cash for various operating expenses
9.paid rent in advance for 3 months at a time
Required:
a)For which of these transactions would adjusting entries be required at the end of the year?
b)Explain the reason why adjusting entries are required before financial statements can be prepared.

Question

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The Answer of Perez Company was founded in 2012 and engaged in the following transactions:
1.issued common stock for cash
2.purchased supplies on account
3.collected cash from a customer for services to be provided over a period of 1 year
4.paid a cash dividend to stockholders
5.purchased a 2-year fire insurance policy
6.provided services to customers on account
7.collected cash from accounts receivable
8.paid cash for various operating expenses
9.paid rent in advance for 3 months at a time
Required:
a)For which of these transactions would adjusting entries be required at the end of the year?
b)Explain the reason why adjusting entries are required before financial statements can be prepared.

Perez Company Was Founded in 2012 and Engaged in the Following