Identify the Effect (A Through H) That Omitting Each of the Following

question 159

Multiple Choice

Identify the effect (a through h) that omitting each of the following items would have on the balance sheet.
-Property taxes are paid annually. The estimated monthly amount for the taxes was not recorded.

• A)Assets and owner's equity overstated
• B)Assets and owner's equity understated
• C)Assets overstated and owner's equity understated
• D)Assets understated and owner's equity overstated
• E)Liabilities and owner's equity overstated
• F)Liabilities and owner's equity understated
• G)Liabilities overstated and owner's equity understated
• H)Liabilities understated and owner's equity overstated

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Definitions:

RAM

Random Access Memory, a type of computer memory that is used to store data temporarily, making it faster to access than disk memory.

ROM

Read-Only Memory, a type of non-volatile storage medium that is used primarily in computers and electronic devices to store firmware or software that is rarely changed.

Primary Storage

The main storage area in a computer system, typically RAM, where the operating system, application programs, and data in current use are kept so they can be quickly reached by the computer's processor.

Secondary Storage

A type of computer storage separate from the main memory, used for keeping data and programs permanently, often referred to as external or auxiliary storage.