Failure to record the supplies used during the year would result in which of the following?
A)Net income being understated.
B)An overstatement of liabilities.
C)Assets and Stockholders' equity being overstated.
D)Total assets being understated.

Question

Quizplus · Accepted Answer

If the supplies used during the year are not recorded, it would result in an overstatement of assets and stockholders' equity. This is because the supplies would still be shown on the balance sheet as an asset, but the expense related to them would not be recognized on the income statement, leading to an overstatement of net income and stockholders' equity. This error would also result in an incomplete and inaccurate balance sheet and income statement as the expenses related to these supplies will be missing.

Failure to Record the Supplies Used During the Year Would