Mattox Corporation Had a Unadjusted Balance of $5,400 in Supplies

question 42

Multiple Choice

Mattox Corporation had a unadjusted balance of $5,400 in Supplies.The actual balance was $150.The accountant failed to make the adjusting entry.What is the effect on the current year financial statements?

• A)Net income is understated by $5,250.
• B)Current assets are overstated by $5,250.
• C)Current assets are understated by $5,400.
• D)Retained Earnings is overstated by $5,400.

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Definitions:

Industry Averages

Statistical metrics that represent the average performance of companies within a particular industry, useful for benchmarking.

Financial Data

Quantitative details about an entity's financial position, performance, and changes in financial position that users rely on to make economic decisions.

Analytical Measures

Techniques used to understand, interpret, and improve business performance through statistical and quantitative analysis.

Sound Judgment

The ability to make considered decisions or come to sensible conclusions.