If the adjustment of the unearned rent account at the end of the period to recognize the amount of rent earned is inadvertently omitted, the net income for the period will be understated.

Learning Objectives

• Acquire knowledge of the definitions and management techniques of prepaid expenses, accrued expenses, and deferred revenues.
• Evaluate the impact that accurate and erroneous adjustments exert on the credibility and comprehensiveness of financial statements.