If a Company Fails to Adjust an Unearned Rent Revenue

question 164

Multiple Choice

If a company fails to adjust an Unearned Rent Revenue account for rent that has been earned, what effect will this have on that month's financial statements?

• A) Assets will be understated and revenues will be understated.
• B) Liabilities will be understated and revenues will be understated.
• C) Liabilities will be overstated and revenues will be understated.
• D) Assets will be overstated and revenues will be understated.

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Definitions:

Reactants

Substances initially present in a chemical reaction that are consumed during the reaction to make products.

Products

Substances resulting from a chemical reaction, process, or biological pathway.

Glucose

A simple sugar that is an important energy source in living organisms and is a component of many carbohydrates.

Carbon Dioxide

A gas that lacks both color and odor, produced from the combustion of carbon and organic elements, and through respiratory activities, captured by plants for their photosynthesis process.