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Lancaster Lumber's accounting manager was reviewing the quarter end trial balance. She noticed that $1,100 in rent collected in advance from a customer had been earmed in the quarter. The account showed no changes from the $1,100 originally recorded. If the appropriate adjusting entry is NOT made, what is the impact on the trial balance accounts? OA Assets would be understated; Expenses would be overstated O. Liabilities would be understated; Expenses would be overstated OC Liabilities would be overstated, Revenues would be understated OD. Liabilities would be understated; Revenues would be overstated.

Lancaster Lumber's accounting manager was reviewing the quarter end trial balance. She noticed that $1,100 in rent collected in advance from a customer had been earmed in the quarter. The account showed no changes from the $1,100 originally recorded. If the appropriate adjusting entry is NOT made, what is the impact on the trial balance accounts? OA Assets would be understated; Expenses would be overstated O. Liabilities would be understated; Expenses would be overstated OC Liabilities would be overstated, Revenues would be understated OD. Liabilities would be understated; Revenues would be overstated.

FINANCIAL ACCOUNTING
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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Lancaster Lumber's accounting manager was reviewing the quarter end trial balance. She noticed that $1,100 in rent collected in advance from a customer had been eamed in the quarter. The account showed no changes from the $1,100 originally recorded. If the appropriate adjusting entry is NOT made, what is the impact on the trial balance accounts? OA Assets would be understated; Expenses would be overstated O. Liabilities would be understated; Expenses would be overstated OC Liabilities would be overstated, Revenues would be understatéd OD. Liabilities would be understated; Revenues would be overstated.
Transcribed Image Text:Lancaster Lumber's accounting manager was reviewing the quarter end trial balance. She noticed that $1,100 in rent collected in advance from a customer had been eamed in the quarter. The account showed no changes from the $1,100 originally recorded. If the appropriate adjusting entry is NOT made, what is the impact on the trial balance accounts? OA Assets would be understated; Expenses would be overstated O. Liabilities would be understated; Expenses would be overstated OC Liabilities would be overstated, Revenues would be understatéd OD. Liabilities would be understated; Revenues would be overstated.
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