Which One of the Following Statements Is NOT Correct

question 35

Multiple Choice

Which one of the following statements is NOT correct?

• A) A misclassification in the balance sheet will have no effect on operating income.
• B) Either an overstatement of an asset account or an understatement of a liability account would have the same effect on the income statement.
• C) Either an understatement of an asset account or an overstatement of a liability account would have the same effect on the income statement.
• D) Either an overstatement of an asset account or an overstatement of a liability account would have the same effect on the income statement.

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Definitions:

Formal Resolution

An official decision or declaration adopted by an organization or assembly through a formal process.

Nontrading Partnership

A partnership focused on activities other than buying and selling goods, such as investment or professional services.

Providing Services

The act of performing tasks or duties, usually professional in nature, for another party in exchange for compensation.

Real Estate Brokerage

A firm or individual who acts as an intermediary between sellers and buyers of real estate, often licensed to manage, negotiate, and arrange sales under the laws of their jurisdiction.