Which of the Following Will Occur If an Adjusting Entry

question 69

Multiple Choice

Which of the following will occur if an adjusting entry to record an unrecorded receivable is NOT made?

• A) Both revenues and assets will be understated.
• B) Both revenues and assets will be overstated.
• C) Revenues will be understated, but assets will be overstated.
• D) Assets will be understated, but revenues will be overstated.

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Definitions:

Undisclosed Principal

A person who directs another to deal with a third party without revealing their identity.

Durable Power

A legal document that grants someone the authority to act on another's behalf in legal and financial matters, which continues to be effective even if the grantor becomes incapacitated.

Power of Attorney

A legal document authorizing one person to act on behalf of another in legal, financial, or personal affairs.

Scope of Employment

The range of activities or duties that an employee is expected to perform as part of their job.