Homework Answers
Answer is (d) assets will be understated and expenses will be overstated.
It is because, prepaid insurance is deducted from insurance expense in income statement as an adjustment which ultimately decreases an expense. If not adjusted expense would be overstated. Prepaid insurance comes on the assets side of the balance sheet. As a result, total assets would increase. If not adjusted, assets would be understated.
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If the Prepaid Insurance account is NOT adjusted: assets will be overstated and expenses will be...
If the prepaid expenses adjustment was not made, Select one: a. liability will be overstated, equity...
If the prepaid expenses adjustment was not made, Select one: a. liability will be overstated, equity understated and expenses understated. b. assets understated, equity understated and expenses overstated. c. assets overstated, equity overstated, and expenses understated. d. assets understated, equity understated and expenses understated.
If the adjustment for prepaid expenses is not recorded a. assets will be understated. ob. expenses...
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