Final answer:
Year-end adjusting entries are needed for recognized revenue on account (if services/goods have not been provided), cash advances received for future services, and prepaid expenses like insurance. Adjusting entries are recorded prior to closing entries to update account balances for the preparation of financial statements.
Step-by-step explanation:
The events that would require a year-end adjusting entry for Norell Inc. during its year 1 accounting period are:
Recognized revenue on account - If this relates to services not yet performed or goods not yet delivered by the year-end, an adjusting entry for unearned revenue may be needed.
Collected a cash advance for services that will be provided during the coming year - This represents unearned revenue and will require an adjusting entry to record the liability until the service is provided.
Paid cash for an insurance policy that provides coverage during the next year - Prepaid expenses like insurance should be adjusted to reflect the expense corresponding to the period.
The other events listed (issuing stock, purchasing supplies, paying dividends, collecting accounts receivable, paying operating expenses, settling accounts payable, and purchasing land) do not typically require year-end adjusting entries unless they relate to services rendered or consumed within the year that have not been properly accounted for.
Regarding the order of entries, adjusting entries are recorded before closing entries.
Adjusting entries are made to update the accounts to their correct balances before preparing the financial statements.
Closing entries are made after the financial statements have been prepared to clear out temporary account balances and transfer them to permanent accounts for the start of the new accounting period.