At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted.Which of the following statements is true?
A)Net income will be overstated for the current year.
B)Total assets will be understated at the end of the current year.
C)The balance sheet and income statement will be misstated but the retained earnings statement will be correct for the current year.
D)Total expenses will be overstated at the end of the current year.

Question

Quizplus · Accepted Answer

Depreciation is an expense that reduces net income. Omitting it means expenses are understated, leading to an overstatement of net income.

At the End of the Fiscal Year, the Usual Adjusting