Year-End Net Assets Would Be Overstated and Current Expenses Would

question 8

Multiple Choice

Year-end net assets would be overstated and current expenses would be understated as a result of failure to record which of the following adjusting entries?

• A) Expiration of prepaid insurance
• B) Depreciation of fixed assets
• C) Use of supplies
• D) All of these answer choices are correct.

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Definitions:

Book Balance

The balance of an account according to the accounting records, before any adjustments or reconciliations have been made.

Check Amount

The sum of money written and authorized for payment on a check.

Internal Controls

Strategies and protocols a corporation uses to safeguard the reliability of their financial and accounting data, encourage responsibility, and avert theft.

Financial Information

Data relating to the financial performance, position, and cash flows of a business, used by stakeholders to make informed decisions.