Regarding the Effects of End-Of-Period Adjustments, State Whether Each of the Following

Essay

Regarding the effects of end-of-period adjustments, state whether each of the following statements is true or false.Recording the usage of supplies involves an increase in liabilities and a decrease in stockholders' equity.The accrual of salaries is considered a claims exchange transaction.Recording services performed on a prepaid contract involves a decrease in liabilities and an increase in assets.End-of-period adjustments often affect cash flows.Failure to record accrued salaries at the end of the year will cause reported net income to be higher than it should have been.