If an Adjustment for Revenue That Has Been Earned but Not

question 85

Multiple Choice

If an adjustment for revenue that has been earned but not recorded was not made

• A)net income and assets would be understated
• B)liabilities and owners' equity would be understated
• C)assets and owners' equity would be overstated
• D)revenues and liabilities would be overstated

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Definitions:

Marginal Cost

The added financial burden from producing one more unit of a product or service.

Marginal Revenue

The surplus revenue earned from the sale of an extra unit of a product or service.

Profit

The earnings obtained when income from a business endeavor outstrips the total expenses, costs, and taxes necessary to maintain that endeavor.

Marginal Revenue

The additional income that is gained from selling one more unit of a product or service.