If an Adjusting Entry for Depreciation Is NOT Made at the End

question 205

Multiple Choice

If an adjusting entry for depreciation is NOT made at the end of the accounting period,what is the effect on net income?

• A)Net income will be too high.
• B)Net income will be too low.
• C)There will be no effect on net income.
• D)Net income will not be affected in the current period,but will be overstated in the next period.

Evaluate the reasons firms enter, stay in, or exit from a market.

Differentiate between average revenue, marginal revenue, and their importance to profit-maximizing firms.

Understand conditions under which the long-run supply curve can be perfectly elastic or slope upward.

Identify circumstances that display the rationale behind seemingly irrational market behaviors.

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Definitions:

Schedule Analysis

A method used to examine and interpret the timing and amounts of future cash flows, expenses, or revenues.

Independent Items

Elements or transactions that do not influence or are not influenced by other items within a financial statement or business process.

Inventory Turnover Ratio

A measure of how quickly a company sells its inventory, indicating the efficiency of inventory management.

Receivable Turnover Ratio

A financial metric that measures how efficiently a company collects cash from its credit sales by calculating the number of times average receivables are collected during a period.