A tired accountant failed to record the adjusting entry for deferred revenues. How does this error affect the balance sheet? O The assets for the period will be understated. O The revenues for the period will be overstated. O The liabilities for the period will be overstated. O The liabilities for the period will be understated. OThe assets for the period will be overstated.

A tired accountant failed to record the adjusting entry for deferred revenues. How does this error affect the balance sheet? O The assets for the period will be understated. O The revenues for the period will be overstated. O The liabilities for the period will be overstated. O The liabilities for the period will be understated. OThe assets for the period will be overstated.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter3: Accrual Accounting

Section: Chapter Questions

Problem 4MCQ: Which of the following statements is false? Adjusting entries are necessary because timing...

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If a company fails to make an adjusting entry to estimate uncollectible accounts, then this error: A understates assets B understates owners equity C overstates experise D overstates net income
The Accountant for the a Company forgot to make an adjusting entry to record depreciation for the current year. The effect of this error would be: a An overstatement of net income and an understatement of assets. b An overstatement of assets offset by an understatement of owners' equity. c An overstatement of assets, net income, and owners' equity. d An overstatement of assets and of net income and an understatement of owners' equity.
The accountant of Newton Legal Services failed to make an adjusting entry for supplies that had been used for the year. Assume the supplies were initially recorded as an asset. Which of the following statements is true? A. The total assets will be understated. B. The total assets will be overstated. C. The equity will be understated. D. The total liabilities will be overstated.
What is the major difference between the unadjusted trial balance and the adjusted trial balance? The adjusted trial balance includes the postings of the adjustments for the period in the balance of the accounts. Unlike the adjusted trial balance, the unadjusted trial balance will continue with the end-of-period processing even if it is not in balance. The adjusted trial balance will be used to record the adjustments for the period. The adjusted trial balance will show the net income (loss) as an additional account.
If you fail to journalize and post the adjusting journal entry to depreciate equipment, what is the impact on the financial statements of the company? There is no impact on either the income statement or the balance sheet. Net income is understated, Assets are Understated, and Retained Earnings are understated Expenses are understated, Assets are overstated, and Retained Earnings are overstated Revenue is understated, Liabilities are understated, and Retained Earnings are understated Expenses are understated, Assets are Understated, and Retained Earnings are understated
Which of the following statements is incorrect? A. Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. B. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. C. Adjusting entries can be used to record both accrued expenses and accrued revenues. D. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time.
Which of the following statements is incorrect? A. Adjustments to prepaid expenses and unearned revenues involve previously recorded assets and liabilities. B. Accrued expenses and accrued revenues involve assets and liabilities that had not previously been recorded. C. Adjusting entries can be used to record both accrued expenses and accrued revenues. D. Prepaid expenses, depreciation, and unearned revenues often require adjusting entries to record the effects of the passage of time. E.Adj usting entries affect only balance sheet accounts.
Failure to prepare an adjusting entry at the end of the period to record an accured expense would casue: (Choose all of the correct ones) A. An understatement of libailities B. An overstatement of revenue C. An understatement of expenses D. An overstatement of net income E. An overstatement of assets
If the income statement error is discovered in the year of error, what action is to be done by the entity? a. Reclassify the item to its proper nominal account. b. Reclassify the item to real account. c. Adjust the effect to the retained earnings account. d. Ignore the error.
When, at the end of an accounting period, a revenue has been recognized in the fi nancial statements but no billing has occurred and no cash has been received, the accrual is to: B . deferred revenue, an asset.
For each of the following situations, indicate whether itrepresents an accounting error and explain why it is or isnot an error. Also state whether a trial balance would indicate that an error exists for each situation.c. An expense was recorded as an asset
Which of the following is the incorrect effect of counterbalancing errors?a. None of the statements is incorrect. b. The statement of financial position at the end of the first period is incorrect. c. The income statements for three successive periods are incorrect. d. The statements of financial position at the end of the second period is correct.