During the adjusting process two transactions were neglected or omitted. The first is for unearned rent revenue of which $475 was earned during the period, the second was for accrued interest payable of which $315 is owed for the period. As a result of these omissions expenses are overstated by $475. net income is overstated by $315. Oliabilities are understated by $160.

During the adjusting process two transactions were neglected or omitted. The first is for unearned rent revenue of which $475 was earned during the period, the second was for accrued interest payable of which $315 is owed for the period. As a result of these omissions expenses are overstated by $475. net income is overstated by $315. Oliabilities are understated by $160.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

During the adjusting process two transactions were neglected or
omitted. The first is for unearned rent revenue of which $475 was earned
during the period, the second was for accrued interest payable of which
$315 is owed for the period. As a result of these omissions
expenses are overstated by $475.
net income is overstated by $315.
liabilities are understated by $160.
These omissions would not affect the financial statements; the financial
statements will be correct.
revenue is understated by $475.

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