Which of the Following Will Happen If the Accrual Adjustment

question 195

Multiple Choice

Which of the following will happen if the accrual adjustment entry is not made to record an expense incurred but not yet recorded?

• A)Both expenses and liabilities will be overstated.
• B)Both expenses and liabilities will be understated.
• C)Expenses will be understated and liabilities will be overstated.
• D)Expenses will be overstated and liabilities will be understated.

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Definitions:

Private Enterprises

Businesses owned by individuals or groups, not by the state, operating for profit in a free market.

Loans

Borrowed sums of money that are expected to be paid back with interest.

Tariffs

Taxes imposed by a government on goods and services imported from other countries, used to control trade, raise government revenue, or protect domestic industries.

Import Quotas

Import Quotas are government-imposed limits on the quantity of certain goods that can be imported, aiming to protect domestic industries.