The trial balance of Bair Company includes the following balance sheet accounts. Identify the accounts that require adjustment. For each account that requires adjustment, indicate (a) the type of adjusting entry (prepaid expenses, unearned revenues, accrued revenues, and accrued expenses) and (b) the related account in the adjusting entry.
To identify the accounts that require adjustment on the trial balance of Bair Company, we need to look for accounts that may need to be adjusted in order to reflect their correct balances as of the end of the reporting period. These adjustments are typically made for certain items that have been either prepaid or earned but not yet recorded, or for expenses that have been incurred but not yet recorded.
Here are the common types of adjusting entries and the related accounts:
1. Prepaid Expenses: These are expenses that have been paid in advance but haven't been used or consumed yet. To adjust these accounts, you need to record the portion of the expense that has been "used up" or "consumed" during the reporting period as an expense. The related account in the adjusting entry would be the specific expense account.
2. Unearned Revenues: These are revenues that have been received in advance but haven't been earned yet. To adjust these accounts, you need to recognize the portion of the revenue that has been "earned" during the reporting period. The related account in the adjusting entry would be the specific revenue account.
3. Accrued Revenues: These are revenues that have been earned but haven't been recorded yet. To adjust these accounts, you need to record the revenue earned in the accounting period. The related account in the adjusting entry would be the specific revenue account.
4. Accrued Expenses: These are expenses that have been incurred but haven't been recorded yet. To adjust these accounts, you need to recognize the expenses incurred in the accounting period. The related account in the adjusting entry would be the specific expense account.
To identify the specific accounts on the balance sheet that require adjustment, you would need to examine each account individually to see if it falls into one of those categories mentioned above. Typically, it may include accounts like Prepaid Rent, Prepaid Insurance, Unearned Revenue, Accrued Revenue, Accrued Salaries, Accrued Interest, and so on.
Please note that without the specific trial balance information of Bair Company, I am unable to provide you with the exact accounts that need adjustment. You would need to refer to the trial balance and analyze each balance sheet account to determine whether adjustments are required and what type of adjusting entry would be applicable.