X company prepares monthly financial statements the balance in unearned(deferred

Question

X company prepares monthly financial statements the balance in unearned(deferred) Revenue on october 1 is $1246 As of october 31 .$440 of the $1246 had been earned but the accountant failed to record the appropriate adjusting entry what was the effect on the october 31 balance sheet ?

A Total assets would be understated by$440

B Retained Earnings would be understated by $806

C total liabilities would be overstated by $440

D Retained Earnings would be overstated by $440

E total liabilities would be overstated by $806

F total liabilities would be understated by $806

Explanation / Answer

C total liabilities would be overstated by $440

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