The accrual of an expense was not recorded. This would
A) overstate expenses and overstate liabilities.
B) overstate expenses and understate liabilities.
C) understate expenses and overstate liabilities.
D) understate expenses and understate liabilities.

Question

Quizplus · Accepted Answer

Failing to record an accrual of an expense would result in expenses being reported as lower than they actually are (understated) and liabilities being reported as lower than they should be (understated), since the expense has not been recognized or recorded as owed.

The Accrual of an Expense Was Not Recorded