Mattox Corporation Had an Unadjusted Balance of $5,000 in Supplies

question 127

Multiple Choice

Mattox Corporation had an unadjusted balance of $5,000 in Supplies. The actual balance was $190. The accountant failed to make the adjusting entry. What is the effect on the current year financial statements?

• A) Net income is understated by $4,810.
• B) Current assets are overstated by $4,810.
• C) Current assets are understated by $5,000.
• D) Retained Earnings is overstated by $5,000.

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Definitions:

Forced Compliance

A situation where individuals are compelled to act in a way that contradicts their beliefs or feelings, often leading to cognitive dissonance.

Bystander Intervention

The act of stepping in to help or prevent harm when witnessing an emergency or a situation where someone is in need.

Intrinsic Motivation

The internal drive to perform an activity for its own sake and personal rewards, rather than for some external reward or pressure.

Preference for Consistency

A psychological trait that denotes a person's desire to maintain uniformity and coherence among their beliefs, values, and actions.