ACC 225 Week 3 DQ 2 Based on the information, the type of adjusting entries the Ritz Manor must have

is unearned revenue. The Ritz Manor receives a one night pay in advance for a reservation. The term unearned revenue refers to cash received in advance of providing products and services (Larson, Wild & Chiapetta, 2005, pg. 101). Also, the Vendalite Companys stocking of the vending machines is a unearned revenue. In turn, it can also be an earned revenue. As products or services are provided, the unearned revenue becomes earned revenues (Larson, Wild & Chiapetta, 2005, pg. 101).

The amounts of these adjustments are determined by how much the Ritz Manor charges for one night in advance and what they earn for the vending machines. The process of adjusting accounts involves analyzing each account balance and the transactions and events that affect to determine any needed adjustments (Larson, Wild & Chiapetta, 2005, pg. 97).

The balance sheet accounts are affected by the adjustments. Each adjusting entry affects one or more income statement accounts and one or more balance sheets accounts (but not cash) (Larson, Wild & Chiapetta, 2005, pg. 105).

Reference Larson, K.D., Wild, J.J., Chiapetta, B. (2005). Fundamental Accounting Principles. Chapter 3, pgs. 93-133. New York: McGraw-Hill Irwin.