During the adjusting process two transactions were neglected or omitted. The first is for unearned rent revenue of which $415 was earned during the period, the second was for accrued interest payable of which $275 is owed for the period. As a result of these omissions
Homework Answers
Your required answer is option B i.e. Revenue is understated by $415
Explanation:
Since company did not recorded the Revenue in the period therefore revenue is understated by $415 and on the other side they also did not record the accrued interest payable which will be showed in liabilities by $275 (for this transaction option is not given in solution).
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When (or as) the company satisfies the performance
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The contract is identified with the client.
Collection is reasonably assured.
2- If Bee Corp. fails to adjust the Unearned Rent account for
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Liabilities will be understated and revenues will be
understated.
Assets will be understated...
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