Fakulti Perniagaan, Ekonomi dan Perakaunan BT 12203 [2-2017/2018] QUIZ 4 BT 1220
ID: 2511382 • Letter: F
Question
Fakulti Perniagaan, Ekonomi dan Perakaunan BT 12203 [2-2017/2018] QUIZ 4 BT 12203 Question 5 Not yet answered Marked out of 1.00 40. C11.Failure to record an adjusting entry at the end of a period for prepaid expense would cause Select one: P Flag question Oa. an understatement of assets and an overstatement of expenses O b. an overstatement of assets and an overstatement of expenses O c. an understatement of assets and an understatement of expenses O d. an overstatement of assets and an understatement of expenses Next
Explanation / Answer
Answer d) An overstatement of assets & an understatement of expenses
Explanation : Adjusting entry at the end of a period for prepaid expense is : -
If the above entry is not passed then expense will not be recorded & thus results in understatement of expenses & the prepaid expense in amount balance sheet will not decrease which indicates overstatement of assets.
Debit Credit Expense XXX Prepaid expense XXXRelated Questions
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