If the Accountant Forgets to Record an Adjustment for Accumulated

question 48

Multiple Choice

If the accountant forgets to record an adjustment for Accumulated Depreciation, Building at the end of the accounting period, this will cause

• A) an overstatement of assets.
• B) an understatement of assets.
• C) an overstatement of expenses.
• D) an overstatement of liabilities.

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Definitions:

Additional Paid-In Capital

The amount of equity capital that is more than the par value of issued shares, representing additional investment from shareholders.

Stock Dividend

A distribution of additional shares of a company's stock to its shareholders, usually in lieu of cash dividends.

Cash Dividends

Direct payments of profit made to shareholders, proportionate to the number of shares they own.

Treasury Stock

Shares that were first put into circulation by a company and then taken back, diminishing the quantity of shares actively traded on the market.