The failure to properly record an adjusting entry to accrue a revenue item will

Question

The failure to properly record an adjusting entry to accrue a revenue item will result in an:

understatement of revenues and an understatement of liabilities.

overstatement of revenues and an overstatement of liabilities.

overstatement of revenues and an overstatement of assets.

understatement of revenues and an understatement of assets.

understatement of revenues and an understatement of liabilities.

overstatement of revenues and an overstatement of liabilities.

overstatement of revenues and an overstatement of assets.

understatement of revenues and an understatement of assets.

Explanation / Answer

Option D. Understatement of revenues and an understatement of assets.

If an Adjusting entry of an revenue item is not passed then credit side of "Service Revenue" will be underreported and debit side of "Accrued Revenue" which is assets will be underreported

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.