If the accountant failed to make the end-of-period adjustment to reduce the Unearned Management Revenue account by the amount of management revenue earned, the omission would cause
A) an overstatement of profit
B) an overstatement of assets
C) an overstatement of liabilities
D) an overstatement of equity
E) an understatement of expenses

Question

Quizplus · Accepted Answer

The omission would cause an overstatement of liabilities because the Unearned Management Revenue account, a liability, would not be reduced to reflect the revenue that has been earned.

If the Accountant Failed to Make the End-Of-Period Adjustment to Reduce