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An adjusted trial balance of Afif & Associates (a legal firm) on 31 October 2021 is as follows: Accounts Debit (RM) Credit (RM) Cash 19,500 Notes Receivable, Short-term 61,000 Rent Receivable 1,500 Office Supplies 13,750 Prepaid Insurance 2,750 Office Equipment 15,000 Accumulated Depreciation – Office Equipment 12,500 Accounts Payable 15,750 Wages Payable 2,250 Unearned Revenue 15,000 Notes Payable, Long-term 25,000 Capital 80,000 Drawings 27,500 Service Revenue 40,250 Rent Revenue 5,500 Wages Expense 38,250 Insurance Expense 6,250 Office Supplies Expense 3,750 Depreciation Expense 2,500 Miscellaneous Expense 4,500 196,250 196,250 REQUIRED: If Afif & Associates failed to make the following adjusting entries at 31 October 2021, what would happen to its net income? i. Rent Revenue RM5,500 ii. Insurance Expense RM6,250 iii. Depreciation Expense RM2,500 Select one: A. Understated of net income by RM5,500 B. Overstated of net income by RM3,250 C. Overstated of net income by RM8,750 D. Understated of net income by RM3,250

An adjusted trial balance of Afif & Associates (a legal firm) on 31 October 2021 is as follows: Accounts Debit (RM) Credit (RM) Cash 19,500 Notes Receivable, Short-term 61,000 Rent Receivable 1,500 Office Supplies 13,750 Prepaid Insurance 2,750 Office Equipment 15,000 Accumulated Depreciation – Office Equipment 12,500 Accounts Payable 15,750 Wages Payable 2,250 Unearned Revenue 15,000 Notes Payable, Long-term 25,000 Capital 80,000 Drawings 27,500 Service Revenue 40,250 Rent Revenue 5,500 Wages Expense 38,250 Insurance Expense 6,250 Office Supplies Expense 3,750 Depreciation Expense 2,500 Miscellaneous Expense 4,500 196,250 196,250 REQUIRED: If Afif & Associates failed to make the following adjusting entries at 31 October 2021, what would happen to its net income? i. Rent Revenue RM5,500 ii. Insurance Expense RM6,250 iii. Depreciation Expense RM2,500 Select one: A. Understated of net income by RM5,500 B. Overstated of net income by RM3,250 C. Overstated of net income by RM8,750 D. Understated of net income by RM3,250

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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51. An adjusted trial balance of Afif & Associates (a legal firm) on 31 October 2021 is as follows: Accounts Debit (RM) Credit (RM) Cash 19,500 Notes Receivable, Short-term 61,000 Rent Receivable 1,500 Office Supplies 13,750 Prepaid Insurance 2,750 Office Equipment 15,000 Accumulated Depreciation – Office Equipment 12,500 Accounts Payable 15,750 Wages Payable 2,250 Unearned Revenue 15,000 Notes Payable, Long-term 25,000 Capital 80,000 Drawings 27,500 Service Revenue 40,250 Rent Revenue 5,500 Wages Expense 38,250 Insurance Expense 6,250 Office Supplies Expense 3,750 Depreciation Expense 2,500 Miscellaneous Expense 4,500 196,250 196,250 REQUIRED: If Afif & Associates failed to make the following adjusting entries at 31 October 2021, what would happen to its net income? i. Rent Revenue RM5,500 ii. Insurance Expense RM6,250 iii. Depreciation Expense RM2,500 Select one: A. Understated of net income by RM5,500 B. Overstated of net income by RM3,250 C. Overstated of net income by RM8,750 D. Understated of net income by RM3,250
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