If an Accountant Fails to Make an Adjusting Entry at the End

question 15

Multiple Choice

If an accountant fails to make an adjusting entry at the end of a fiscal period to record expired insurance, the omission will cause

• A) total assets to be understated.
• B) total expenses to be understated.
• C) total revenue to be understated.
• D) liabilities to be overstated.
• E) liabilities to be understated.

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Definitions:

Married Filing Jointly

A tax filing status for married couples who choose to file a single tax return together, combining their incomes and deductions.

Marginal Tax Rate

The rate at which the last dollar of a taxpayer's income is taxed, indicating the rate applied to each additional dollar of income.

Taxable Income

The amount of income used to determine how much tax an individual or a company owes to the government in a given tax year.

U.S. Tax Court

A federal court that provides taxpayers a venue to dispute tax assessments by the IRS without having to pay the disputed amount upfront.