At the End of the Fiscal Year, the Usual Adjusting

question 98

Multiple Choice

At the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. Which of the following statements is true?

• A) Total assets will be understated at the end of the current year.
• B) The balance sheet and income statement will be misstated, but the retained earnings statement will be correct for the current year.
• C) Net income will be overstated for the current year.
• D) Total liabilities and total assets will be understated.

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Definitions:

MRP

Material Requirements Planning, a system for planning production and inventory control, ensuring materials and products are available for production and delivery.

Time Period

Refers to a specific duration or interval in which certain events or processes take place.

Net Requirements

The actual amount of materials or resources needed for production, calculated after considering the on-hand inventory and pending orders, to meet the production schedule.