Assume Select Made No Adjusting Entry with Respect to This

question 154

Multiple Choice

Assume Select made no adjusting entry with respect to this note before preparing the financial statements at December 31,2018.What is the effect of this error on the financial statements for 2018?

• A)Total liabilities are overstated.
• B)Net income is overstated.
• C)Owners' equity is understated.
• D)Interest Payable is overstated.

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Definitions:

Condition

A health-related situation.

POA

Point of attachment; however, it can also refer to Present On Admission in a medical context.

Congenital Aortic

Refers to any birth defect of the aorta, the major artery carrying blood from the heart to the rest of the body, which can affect blood flow and circulation.

Septum

A wall or partition dividing a body space or cavity, such as the nasal septum which divides the nostrils.