The accountant failed to make the adjusting entry to record the depreciation for the year. This error would cause
A) an overstatement of assets.
B) an overstatement of expenses.
C) an understatement of liabilities.
D) an understatement of shareholders' equity.

Question

Quizplus · Accepted Answer

Failing to record depreciation results in an overstatement of assets because the value of the assets is not accurately reduced to reflect their use and wear over time.

The Accountant Failed to Make the Adjusting Entry to Record