If the purchase of supplies on account is not recorded then:
A) liabilities will be overstated.
B) expenses will be overstated.
C) cash will be understated.
D) liabilities will be understated.

Question

Quizplus · Accepted Answer

If the purchase of supplies on account is not recorded, then the liabilities will be understated. This is because the amount that the company owes to the supplier would not be reflected in the financial statements, resulting in an understatement of the company's total liabilities.

If the Purchase of Supplies on Account Is Not Recorded