If an adjusting entry is not made for an accrued expense,
A) expenses will be overstated.
B) liabilities will be understated.
C) net income will be understated.
D) stockholders' equity will be understated.

Question

Quizplus · Accepted Answer

An accrued expense is a liability that has been incurred but not yet paid. If an adjusting entry is not made, liabilities will be understated because the expense has not been recorded as a liability.

If an Adjusting Entry Is Not Made for an Accrued