Mobo, a wireless phone carrier, completed its first year of operations on October 31. All of the year's entries have been recorded, except for the following:

Mobo, a wireless phone carrier, completed its first year of operations on October 31. All of the year's entries have been recorded, except for the following:

a.	At year-end, employees earned wages of $6,100, which will be paid on the next payroll date, November 6.
b.	At year-end, the company had earned interest revenue of $3,100. It will be collected December 1.

Required:
1.	What is the annual reporting period for this company?
	November 1 through October 31. 2. Identify whether each required adjustment is a deferral or an accrual.   Both transactions are accruals Explanation: 2. Both transactions are accruals because revenue has been earned and expenses incurred but no cash has yet been received or paid. Show the accounting equation effects of each required adjustment. 4. Why are these adjustments needed?   Adjustments are needed to ensure the financial statements are up-to-date and complete.   Explanation: 4. Adjustments are needed to ensure the financial statements are up-to-date and complete. Adjusting entries are necessary at the end of the accounting period to ensure that all revenues earned and expenses incurred and the related assets and liabilities are measured properly. The entries above are accruals; entry (a) is an accrued expense (incurred but not yet recorded) and entry (b) is an accrued revenue (earned but not yet recorded). In applying the accrual basis of accounting, revenues should be recognized when earned and expenses should be recognized when incurred in generating revenues.