Nobells Corp

question 56

Multiple Choice

Nobells Corp. has acquired land and paid an amount of $500 as brokerage to acquire the land. However, the company's accountant has recorded the $500 as a revenue expenditure. What is the effect of this error?

• A)Net income is understated by $500.
• B)Liabilities are overstated by $500.
• C)Revenue is overstated by $500.
• D)Assets are overstated by $500.

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Definitions:

Eurodollars

U.S. dollars deposited in banks outside the United States, often used in international transactions.

American Dollars

The currency of the United States of America, widely used in international transactions and known as the USD.

European Banks

Financial institutions operating in Europe, subject to the region's regulatory frameworks, providing a range of banking and financial services.

American Firm

A company that is incorporated or has its principal operations in the United States of America.