If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at the end of the accounting period, this will cause
A) an overstatement of assets.
B) an understatement of assets.
C) an overstatement of expenses.
D) an overstatement of liabilities.

Question

Quizplus · Accepted Answer

Failing to record an adjustment for Accumulated Depreciation results in not recognizing the depreciation expense for the period. This means the value of the building asset on the balance sheet remains higher than it should be, leading to an overstatement of assets. Accumulated Depreciation is a contra asset account that reduces the book value of the asset it is associated with.

If the Accountant Forgets to Record an Adjustment for Accumulated