11&21 What is the effect of omission of accrued expenses in assets at the end of the yearof error?O No effectO UnderstatedO Cannot be determined from the given informationO Overstated Net income at year end will be overstated ifO Accrued income is not recognizedO Inventory at year end is understatedO Purchases during the year are understatedO Prepaid expense is not recognized

Accrued expenses are expenses which have been incurred but remain unpaid at the end of the year.…

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Business

Accounting

of omission of accrued expenses in assets at the end of t

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

11&21

What is the effect of omission of accrued expenses in assets at the end of the year
of error?
O No effect
O Understated
O Cannot be determined from the given information
O Overstated

Net income at year end will be overstated if
O Accrued income is not recognized
O Inventory at year end is understated
O Purchases during the year are understated
O Prepaid expense is not recognized

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