At the end of the current year, the required adjusting entry for depreciation on equipment was omitted.Which of the following statements is true regarding the current year's financial statements?
A)Net income will be overstated.
B)Total assets will be understated.
C)The statement of financial position and statement of income will be misstated but the statement of changes in equity will be correct.
D)Retained earnings will be understated.

Question

Quizplus · Accepted Answer

Depreciation is an expense that reduces net income. If the adjusting entry for depreciation is omitted, expenses are understated, leading to an overstatement of net income.

At the End of the Current Year, the Required Adjusting