Adonis, Inc. paid $3,000 for three months of rent on November 1, 2020. At December 31, 2020, the company's bookkeeper made a mistake and forgot to prepare the required adjustment to record rent expense. Because of this error both total expenses and net income are understated. expenses are overstated and net income is understated. both total assets and expenses are overstated. O total assets are correct and expenses are understated. both net income and total assets are overstated.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Adonis, Inc. paid $3,000 for three months of rent on November 1, 2020. At December 31, 2020, the
company's bookkeeper made a mistake and forgot to prepare the required adjustment to record rent
expense. Because of this error
both total expenses and net income are understated.
O expenses are overstated and net income is understated.
both total assets and expenses are overstated.
O total assets are correct and expenses are understated.
both net income and total assets are overstated.
Transcribed Image Text:Adonis, Inc. paid $3,000 for three months of rent on November 1, 2020. At December 31, 2020, the company's bookkeeper made a mistake and forgot to prepare the required adjustment to record rent expense. Because of this error both total expenses and net income are understated. O expenses are overstated and net income is understated. both total assets and expenses are overstated. O total assets are correct and expenses are understated. both net income and total assets are overstated.
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