Failure to record an accrued liability causes a company to:
A)understate liabilities.
B)understate owners' equity.
C)overstate expenses.
D)overstate assets.

Question

Quizplus · Accepted Answer

Failure to record an accrued liability means that the liability is not reflected in the financial statements, which leads to an understatement of liabilities. This, in turn, affects the accuracy of the balance sheet and income statement, as the omission of the liability can distort the financial position and performance of the company. The other options are not directly affected by the failure to record an accrued liability.

Failure to Record an Accrued Liability Causes a Company To