Response to the following questions:
1. Employees performed services in 2006, but the wages were not paid until 2007. During which year would the wages expense be reported on the income statement under (a) the cash basis? (b) the accrual basis?
2. Is the land balance before the accounts have been adjusted the amount that should normally be reported on the balance sheet? Explain.
3. Identify the four different categories of adjustments frequently required at the end of an accounting period.