If a Company Mistakenly Forgot to Record Depreciation on Office

question 83

Multiple Choice

If a company mistakenly forgot to record depreciation on office equipment at the end of an accounting period, the financial statements prepared at that time would show:

• A) Assets, net income, and equity understated.
• B) Assets overstated and equity understated.
• C) Assets and equity both understated.
• D) Assets, net income, and equity overstated.
• E) Assets overstated, net income understated, and equity overstated.

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Definitions:

Interest

The charge for borrowing money, typically expressed as an annual percentage rate, or the profit earned on money invested.

Obey

To follow or comply with commands, restrictions, or instructions, often from an authority or rule.

Contract

An agreement that is enforceable by law, involving two or more parties, which stipulates their duties and entitlements.

Ratification

The act of officially approving an agreement or treaty, often by a vote or other formal decision.