Question: 1. Disc Coproration collected $1,200 from a client on December 31, 2012. The $1,200 is collected in advance of office rent for january and february of 2013. What effect does the 12/31/12 transaction, if properly recoded, have on Disc's 2012 income statement and 12/31/12 balance sheet?
2. The Cash account is not increased or decreased when adjusting entries are prepared. why?