At Year-End It Was Forgotten to Adjust the Asset Prepaid

question 50

Multiple Choice

At year-end it was forgotten to adjust the asset prepaid rent for the $5,000 rent expense used up during the year. This will result in an:

• A) overstatement of assets, profit, and equity.
• B) understatement of assets and an overstatement of profit and equity.
• C) understatement of assets, profit, and equity.
• D) overstatement of liabilities and an understatement of profit and equity.

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Definitions:

Reprieve

A temporary delay in the execution of a punishment, especially a death sentence, or a temporary relief from an unpleasant situation.

Imports

Goods and services brought into a country from abroad for sale.

Foreign Countries

Nations that are outside of one's own country, often referring to international relations or policies.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, typically measured by the gross domestic product (GDP).