All of the Following Adjustments Can Be Used to Understate

question 31

Multiple Choice

All of the following adjustments can be used to understate accounts payable EXCEPT:

• A)Recording purchases after year end
• B)Overstating purchase discounts
• C)Understating purchase returns
• D)Omitting purchases

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Definitions:

Liabilities

Financial obligations a company owes to outside parties.

Assets

Resources owned or controlled by a business, which are expected to produce future economic benefits.

Accounting Equation

The fundamental principle of accounting that states Assets = Liabilities + Equity, which must always be in balance for accurate financial reporting.

Net Income

Net income is the total profit of a company after all expenses, including taxes and operational costs, are subtracted from its total revenue.