Asked by Krystina Colon on May 31, 2024
Verified
No adjustment was made for supplies used up during the month.
A) Assets and owner's equity overstated
B) Assets and owner's equity understated
C) Assets overstated and owner's equity understated
D) Assets understated and owner's equity overstated
E) Liabilities and owner's equity overstated
F) Liabilities and owner's equity understated
G) Liabilities overstated and owner's equity understated
H) Liabilities understated and owner's equity overstated
Supplies Used
The amount of supplies consumed during a specific period, which may be accounted for as an expense.
Balance Sheet
A ledger entry detailing a business’s resources, debts, and equity ownership at a fixed point in time.
Adjustment
A modification made to an account or financial statement to correct an error or reflect new information.
- Assess the ramifications on financial statements resulting from the absence of specific adjusting entries.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
A
Explanation :
Not adjusting for supplies used up during the month means the supplies asset account remains higher than it should be, overstating assets. Since expenses are understated, net income is overstated, leading to an overstatement of owner's equity.
Learning Objectives
- Assess the ramifications on financial statements resulting from the absence of specific adjusting entries.