Able Industries has the following information related to its adjusting entries at the end of December.
. Services have been performed for customers that have not yet been billed or received totaling $200.
.The office equipment computation for 2018 depreciation amounts to $580.
What is the net effect that the necessary adjusting entries for this information have on net income for Able?

Question

Quizplus · Accepted Answer

The services performed for customers that have not yet been billed or received would increase revenue and net income if recognized, but since they have not yet been recognized, the adjustment entry will decrease net income by $200. The office equipment depreciation expense of $580 would decrease net income by $580. The net effect of the necessary adjusting entries would be a decrease of $200 + $580 = $780 in net income.

Able Industries Has the Following Information Related to Its Adjusting