Failure to Record Depreciation at Year-End Will

question 83

Multiple Choice

Failure to record depreciation at year-end will

• A)overstate total liabilities.
• B)understate assets.
• C)overstate assets.
• D)understate owners' equity.
• E)overstate revenue.

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Definitions:

Operating Activities

Business activities directly related to the production and delivery of goods and services, affecting the operating income.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Direct Method

A cash flow statement presentation that lists specific types of cash receipts and payments, used to reveal actual cash flow activities.

Accounts Receivable

Indicates the funds to be received by a business for credit sales made to customers, reflecting potential income.