Failure to Make a Necessary Adjusting Entry for Accrued Interest

question 103

Multiple Choice

Failure to make a necessary adjusting entry for accrued interest on a note payable would cause which of the following?

• A)An understatement of liabilities and shareholders' equity.
• B)Profit to be overstated and assets to be understated.
• C)Profit to be understated and liabilities to be understated.
• D)An overstatement of profit,an understatement of liabilities,and an overstatement of shareholders' equity.

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