If Prepaid Expenses Are Initially Recorded in Expense Accounts and Have

question 146

Multiple Choice

If prepaid expenses are initially recorded in expense accounts and have not all been used at the end of the accounting period, the failure to make an adjusting entry will cause

• A) assets to be understated.
• B) assets to be overstated.
• C) expenses to be understated.
• D) contra-expenses to be overstated.