If a company fails to make an adjusting entry to record supplies expense, then
A) stockholders' equity will be understated.
B) expense will be understated.
C) assets will be understated.
D) net income will be understated.

Question

Quizplus · Accepted Answer

If a company fails to make an adjusting entry to record supplies expense, the expense will be understated because the cost of supplies used is not recorded, leading to an overstatement of net income and assets.

If a Company Fails to Make an Adjusting Entry to Record