At Year-End It Was Forgotten to Accrue a $2,000 Expense

question 35

Multiple Choice

At year-end it was forgotten to accrue a $2,000 expense. This will result in an:

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

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Definitions:

Actual Work

The physical or mental effort expended towards the completion of tasks, often considered in contrast to planning or theoretical development.

Third Restatement

The Third Restatement refers to updated versions of the American Law Institute's restatements on various areas of law, providing a contemporary summary of common law principles.

Principal Goes Bankrupt

When a principal goes bankrupt, it refers to a situation where the main party in a financial or business agreement is unable to repay debts and legally declares bankruptcy.

Discharge

The act of formally releasing someone from their duties, often used in the context of employment termination.