If a Company Fails to Make an Adjusting Entry to Record

question 81

Multiple Choice

If a company fails to make an adjusting entry to record supplies expense, then

• A)shareholders' equity will be understated.
• B)expenses will be understated.
• C)assets will be understated.
• D)profit will be understated.

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Definitions:

U.S. Government Securities

Financial instruments issued by the United States Department of the Treasury to finance federal government spending, considered very low risk.

Full-Employment Output

is the level of output that an economy can produce when operating at a full employment level, where all available labor and resources are being used efficiently.

Government Securities

Financial instruments issued by the government to finance its expenditures, offering investors a relatively safe investment option compared to other securities.

Discount Rate

The interest rate charged to commercial banks and other financial institutions for loans received from a country's central bank.