If an adjusting entry is not made for an accrued revenue
A) assets will be overstated.
B) expenses will be understated.
C) owner's equity will be understated.
D) revenues will be overstated.

Question

Quizplus · Accepted Answer

If an adjusting entry is not made for an accrued revenue, revenues that have been earned but not recorded will be omitted, leading to an understatement of owner's equity, since net income (and thus owner's equity) is increased by revenues.

If an Adjusting Entry Is Not Made for an Accrued