If a Company Failed to Make the End-Of-Period Adjustment to Move

question 242

Multiple Choice

If a company failed to make the end-of-period adjustment to move the amount of management fees that were earned from the Unearned Management Fees account to the Management Fees Revenue account, this omission would cause:

• A) An overstatement of liabilities.
• B) An overstatement of assets.
• C) An understatement of liabilities.
• D) An overstatement of net income.
• E) An overstatement of equity.

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Definitions:

Health Savings Account

A tax-advantaged savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan.

High Deductible Health Plan

A health insurance plan with lower premiums and higher deductibles than traditional health plans, often coupled with a Health Savings Account (HSA).

Unreimbursed

Expenses that have not been paid back or compensated, especially reference to employee business expenses.

Tax-exempt

Not subject to tax by federal or local authorities, often applicable to certain income, property, or organizations.