Understating Expenses Occurs By

question 14

Multiple Choice

Understating expenses occurs by:

• A)omitting depreciation expense at the end of the year.
• B)recording depreciation expense twice at the end of the year.
• C)recording depreciation over an estimated life of an equipment.
• D)paying in advance for insurance and creating a prepaid insurance account.

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Definitions:

Brokers

The people who organize transactions between buyers and sellers.

Money

A medium of exchange in the form of coins and banknotes; used to purchase goods and services or measure value and wealth.

Revenue

The income that a business earns from its normal business activities, usually from the sale of goods and services to customers.

Income

Money received, especially on a regular basis, for work or through investments.