I don't understand what this question is asking: Preparing Adjusting entries: QUESTION: For each of the adjusting entries listed, explain why it is necessary and whether it increases or decreases financial position and whether it increases or decreases profitability (also called performance) On November 30, the end of the current fiscal year, the following information is available to assist Caruso Corp.'s accountants in making adjusting entries: a. Caruso Corp's Supplies account shows a beginning balance of $2,350. Purchases during the year were $4,218. The end-of-year inventory reveals supplies on hand of $ 1,397. b. The Prepaid Insurance account shows the following on Nov 30: Beginning balance $4,720, July 1 $4,200, Oct 1 $7,272...The beginning balance represents additional coverage in the form of a three-year policy. c. The following contains the cost and annual depreciation for buildings and equipment, all of which Caruso purchased before the current year: Buildings $298,000 (Annual Depreciation $16,000) Equipment $374,000 (Annual Depreciation $40,000) d. On Sept 1, the company completed negotiations with a client and accepted an advance payment of $18,600 for services to be performed in the next year. The $18,600 was credited to the Unearned Service Revenue account. e. The company calculated that as of Nov. 30, it had earned $7,000 on an $11,000 contract that would be completed and billed in Jan. f. Among the liabilities of the company is a note payable in the amount of $300,000. On Nov 30, the accrued interest on this note amounted to $18,000.