Q. 1. MR. X owns a small law firm. He does the accounting himself and uses an accrual basis for accounting. At the end of his first month, he reviews his records and realizes there are a few inaccuracies on this unadjusted trial balance. One difference is the supplies account; the figure on paper does not match the value of the supplies inventory still available. Another difference was interest earned from his bank account. He did not have anything recognizing these earnings. Why did his unadjusted trial balance have these errors? What can be attributed to the differences in supply figures? What can be attributed to the differences in interest earned? Explain.
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It is prepared to ensure that the total debits equal the total credits and to identify any errors or discrepancies in the accounting records. In the case of Mr. X's law firm, there are two differences in the unadjusted trial balance: the supplies account and the Show more…
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