Failure to record a liability will probably
A) have no effect on net earnings.
B) result in overstated total liabilities and shareholders' equity.
C) result in overstated total assets.
D) result in overstated net earnings.

Question

Quizplus · Accepted Answer

Failing to record a liability means that expenses that should have been recorded are omitted. This omission would lead to higher net earnings than should be the case, as expenses are understated.

Failure to Record a Liability Will Probably