If Prepaid Expenses Are Initially Recorded in Expense Accounts and Have

question 3

Multiple Choice

If prepaid expenses are initially recorded in expense accounts and have not all been used at the end of the accounting period then 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.

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Definitions:

Sum

The result of adding two or more numbers or quantities together to get a total.

Relative Frequency Distribution

A statistical measure that shows the frequency of different outcomes in a dataset relative to the total number of outcomes.

Proportion

The fraction of a whole that represents a part of the total population or quantity.

Data Values

The individual pieces of information collected in a study or used in calculations, which can be numerical or categorical.