Failure to Prepare an Adjusting Entry at the End of the Period

question 77

Multiple Choice

Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause

• A) net income to be understated.
• B) an overstatement of assets and an overstatement of liabilities.
• C) an understatement of expenses and an understatement of liabilities.
• D) an overstatement of expenses and an overstatement of liabilities.

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Definitions:

Parol Evidence Rule

is a principle in contract law that prevents parties from presenting extrinsic evidence of conversations, agreements, or documents to alter or contradict the terms of a written contract.

Collateral Promise

A secondary agreement made to take responsibility for another's performance under a contract, often requiring a writing to be enforceable.

Personnel Manager

An individual responsible for overseeing the human resource department of an organization, dealing with staffing, training, and employee welfare.

Statute of Frauds

A legal principle that requires certain contracts to be in writing and signed by all parties involved to be enforceable.