What Will Be the Result If the Adjusting Entry to Record

question 5

Multiple Choice

What will be the result if the adjusting entry to record the current period's depreciation on equipment is not recorded?

• A) The net income for the period will be understated.
• B) The net income for the period will be overstated.
• C) The net income for the period will not be affected.
• D) The assets for the period will be understated.

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Definitions:

Semi-annual Withdrawals

Withdrawals made twice a year from an account or investment.

Compounded Annually

The method of calculating interest in which the interest earned each year is added to the principal, so that the balance doesn't merely grow, it grows at an increasing rate.

Monthly Payments

Regular payments made each month towards the repayment of a loan or financial obligation.

Finance

The management of money and other assets by individuals, companies, or governments.