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:

Franchise Taxes

Taxes levied on businesses for the privilege of operating as a corporation or LLC within a particular state.

Registered Agent

A person or company designated to receive official legal and tax documents on behalf of a business entity.

Surviving Corporation

The corporation that remains after a merger, having absorbed another corporation and retained its rights, privileges, and liabilities.

Total Assets

The sum of all current and non-current assets owned by an individual or company, reflecting the total resources or value that the entity controls.