A Company Forgot to Record Four Adjustments During 2012

question 28

Multiple Choice

A company forgot to record four adjustments during 2012. Which one of the following omissions of adjustments will understate assets?

• A) Unearned revenue is not reduced for the portion that has been earned
• B) Interest on money loaned out has not yet been recorded
• C) Prepaid insurance is not reduced for the portion of the policy that has expired during the period
• D) Income taxes owed but not yet paid are ignored

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