When paying off a note payable,last year's accrual was ignored and the total interest was recorded as an expense.This error would cause:
A)the period end assets to be understated.
B)the period end liabilities to be understated.
C)the period's net income to be understated.
D)the period's net income to be overstated.

Question

Quizplus · Accepted Answer

Ignoring last year's accrual would mean that interest expense would have been understated last year and overstated this year, causing the period's net income to be understated.

When Paying Off a Note Payable,last Year's Accrual Was Ignored