Non-recognition of deferral at the end of the accounting period will a.understate income and understate expense during the year of non-recognition b.overstate income or expenses, depending on account to be deferred is affected. c.understate income or expenses, depending on account to be deferred is affected. d.overstate income and understate expense during the year of non-recognition

Non-recognition of deferral at the end of the accounting period will a.understate income and understate expense during the year of non-recognition b.overstate income or expenses, depending on account to be deferred is affected. c.understate income or expenses, depending on account to be deferred is affected. d.overstate income and understate expense during the year of non-recognition

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.23E: The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent...

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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.
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