Indicate the impact on the income statement and balance sheet if the following adjusting entries were omitted. You should indicate which of the items shown would be overstated or understated. No adjustment was made for supplies used up during the month. Revenues Understated Expenses Overstated Net Income Understated Assets Understated ÷ Liabilities Overstated Owner's Equity Correct

Indicate the impact on the income statement and balance sheet if the following adjusting entries were omitted. You should indicate which of the items shown would be overstated or understated. No adjustment was made for supplies used up during the month. Revenues Understated Expenses Overstated Net Income Understated Assets Understated ÷ Liabilities Overstated Owner's Equity Correct

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Income Statement Balance Sheet Net Income Owners' Equity Adjustment Revenue Expenses Assets Liabilities Туреl Converting Assets to Expenses Туре I Converting Liabilities to Revenue No effect Increase Decrease Decrease No effect Decrease Increase No effect Increase No effect Decrease Increase Туре II Accruing Unpaid Expenses Туре IV Accruing Uncollected Revenue No effect Increase Decrease No effect Increase Decrease Increase No effect Increase Increase No effect Increase Requirement: Put the effect of following adjustments
An adjusting entry to recognize accrued salaries payable would cause which of the following? Group of answer choices A. An increase in expenses and liabilities. B. A decrease in liabilities and an increase in expenses. C. A decrease in assets and liabilities. D. An increase in revenues and liabilities.
Determine the excess of revenues over expenses for November? Can you think of any reason why the amount determined in (4) might not be the net income for November? A. Because the closing inventory balance is missing. B. Because the dividends are declared but not paid. C. Because necessary adjustment to expenses, like depreciation has not been made. D. Because the cash balance is incorrect.
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.
Which statement is true about an adjusted trial balance? Multiple Choice Balance sheet items are presented before income statement items. It is prepared before adjusting entries. Accumulated depreciation should equal depreciation expense. Revenue accounts and expense accounts should not appear on the adjusted trial balance.
Which of the following types of adjusting entries would result in a decrease in the amount of a one-year insurance policy premium reported on the balance sheet? Select one: O a. Prepaid expense b. Accrued expense C. Accrued revenue d. Unearned revenue
9. An adjusting entry in relation to unearned revenues will: a. increase total liabilities. b. increase total equity. C. decrease total assets. d. have no effect on income.
If an adjusting entry is not made to accrue expenses, then the balance sheet * ?liabilities will be Understated Overstated
5. The following items affect the retained earnings account, except Group of answer choices a. net income or loss for the period b. prior period errors c. realization of revaluation surplus d. effect of change in accounting estimate
Match the statements below with the accounting assumption, characteristic, or principle to which the statement relates. Assumptions/characteristics/principles may be used once, more than once, or not at all. Recorded when the performance obligation is satisfied. a. Revenue recognition principle V The reason for recording accruals and deferrals in adjusting entries. b. Matching principle Valuing assets at amounts originally paid for them. C. Historical cost principle Entity assumed to have a long life d. Going concern assumption Description of significant accounting policies and unusual events. e. Full disclosure principle v Information has predictive and confirmatory value. T. Relevance characteristic 8. Consistency characteristic
An adjusting entry to recognize accrued interest payable would cause which of the following? Group of answer choices A. An increase in expenses and liabilities. B. A decrease in liabilities and an increase in expenses. C. A decrease in assets and liabilities. D. An increase in revenues and liabilities
If a company doesn’t make adjusting entry for accrued expenses: Liabilities will be overstated; expenses and net income will be understated. Liabilities, expenses and net income will be overstated. Liabilities; expenses and net income will be understated. Liabilities and expenses will be understated, net income will be overstated.