If the Accountant Failed to Make the End-Of-Period Adjustment to Reduce

question 98

Multiple Choice

If the accountant failed to make the end-of-period adjustment to reduce the Unearned Management Revenue account by the amount of management revenue earned, the omission would cause:

• A)An overstatement of profit.
• B)An understatement of expenses.
• C)An overstatement of equity.
• D)An overstatement of liabilities.
• E)An overstatement of assets.

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Definitions:

Risk-free Asset

An investment with a guaranteed return and no risk of loss, often represented by government bonds.

Beta

An evaluation of the consistent risk or volatility of a security or a portfolio relative to the overall market.

Portfolio Beta

A measure of the overall risk of a portfolio of investments, comparative to the market as a whole.

Risk-free Asset

An asset which is presumed to have a guaranteed return with no risk of financial loss.