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On April 1, a company takes on an 18- month job and receives a $10,000 advance that is recorded in Revenue. If no adjusting entry is made at year-end, how will the financial statements be affected? Assets 1. overstated affected 2. overstated overstated 3. understated affected 4. understated understated 4 3 Net income 01 02 Liabilities not understated not affected not overstated not affected

On April 1, a company takes on an 18- month job and receives a $10,000 advance that is recorded in Revenue. If no adjusting entry is made at year-end, how will the financial statements be affected? Assets 1. overstated affected 2. overstated overstated 3. understated affected 4. understated understated 4 3 Net income 01 02 Liabilities not understated not affected not overstated not affected

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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On April 1, a company takes on an 18- month job and receives a $10,000 advance that is recorded in Revenue. If no adjusting entry is made at year-end, how will the financial statements be affected? Assets 1. overstated affected 2. overstated overstated 3. understated affected 4. understated understated 4 3 1 Net income 02 Liabilities not understated not affected not overstated not affected
Transcribed Image Text:On April 1, a company takes on an 18- month job and receives a $10,000 advance that is recorded in Revenue. If no adjusting entry is made at year-end, how will the financial statements be affected? Assets 1. overstated affected 2. overstated overstated 3. understated affected 4. understated understated 4 3 1 Net income 02 Liabilities not understated not affected not overstated not affected
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