If an Adjusting Entry Is Not Made at the End

question 106

Multiple Choice

If an adjusting entry is not made at the end of an accounting period to remove the earned revenue from the Unearned Revenue account,

• A)assets would be understated.
• B)owner's equity would be overstated.
• C)liabilities would be understated.
• D)liabilities would be overstated.

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Definitions:

Closely Held

Refers to a company that has a small group of controlling shareholders, with limited public trade of its shares.

Borrow

To receive something of value with the promise to return it or its equivalent to the lender at a later date.

Bond Issue

The process by which a borrower issues bonds to lenders or investors to raise capital under specified terms.

Coupon

Coupon refers to the interest payment associated with a bond or fixed-income security, typically expressed as a percentage of the bond's face value and paid at regular intervals.