At January 31, the End of the First Month of the Year

question 119

Essay

At January 31, the end of the first month of the year, the usual adjusting entry transferring expired insurance to an expense account is omitted. Which items will be incorrectly stated, because of the error, on
(a) the income statement for January and
(b) the balance sheet as of January 31? Also indicate whether the items in error will be overstated or understated.

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Definitions:

Blood Clot

A mass formed by the coagulation of blood to stop bleeding in response to an injury or cut.

Vitamin K

A fat-soluble vitamin important for blood clotting and bone health, found in green leafy vegetables, vegetable oils, and some fruits.

Fat-Soluble Vitamin

Vitamins that dissolve in fats and oils, can be stored in the body's fatty tissue and liver, including vitamins A, D, E, and K.

Vitamin E

A fat-soluble vitamin important for maintaining healthy skin and a strong immune system, also acting as an antioxidant.