Able Industries has the following information related to its adjusting entries at the end of December.
.On December 31, 2018, the insurance expired amounted to $100.
.Of the unearned revenue, $300 of services had been performed.
What is the net effect that the necessary adjusting entries for this information have on net income for Able?

Question

Quizplus · Accepted Answer

The insurance expense of $100 decreases net income, while recognizing $300 of earned revenue increases net income. The net effect is a $200 increase in net income ($300 - $100 = $200).

Able Industries Has the Following Information Related to Its Adjusting