The Failure to Properly Record an Adjusting Entry to Accrue

question 129

Multiple Choice

The failure to properly record an adjusting entry to accrue a revenue item will result in an

• A) understatement of revenues and an understatement of liabilities.
• B) overstatement of revenues and an overstatement of liabilities.
• C) overstatement of revenues and an overstatement of assets.
• D) understatement of revenues and an understatement of assets.

---

Definitions:

East Segment

A division or geographical area of a business focused on the eastern region, often used in reporting or segmenting operations.

Segment Margin

The profit generated by a particular segment of a business, after deducting direct and allocated expenses specific to the segment.

Segmented Income Statement

A financial statement that breaks down revenues, costs, and profits for different parts of an organization, such as departments or product lines.

Contribution Format

An income statement format that separates variable costs from fixed costs, highlighting the contribution margin of sales over variable costs.