The failure to properly record an adjusting entry to accrue an expense will result in an

a. overstatement of expenses and understatement of liabilities

b. understatement of expenses and overstatement of liabilities

c. understatement of net income and understatement of liabilities

d. overstatement of net income and understatement of liabilities

e. understatement of expenses and overstatement of assets

Question

Business

Shyla Welch

21 February, 13:57

The failure to properly record an adjusting entry to accrue an expense will result in an

a. overstatement of expenses and understatement of liabilities

b. understatement of expenses and overstatement of liabilities

c. understatement of net income and understatement of liabilities

d. overstatement of net income and understatement of liabilities

e. understatement of expenses and overstatement of assets

+1

Answers (1)

Know the Answer?

Emerson Hale · Answer 1

d. overstatement of net income and understatement of liabilities

Explanation:

When the company fail in adjusting an accrue expenses it's overstating the Net Income because is not recognizing an expense that happenned and is underestimating the liabilities, with the entry it's recognizig that the company incurred in expenses, in other way the expenses are not recognizing during the current year.