Failure to record a liability will probably
A)result in overstated net income.
B)result in overstated total liabilities and shareholders' equity.
C)have no effect on net income.
D)result in overstated total assets.

Question

Quizplus · Accepted Answer

Failing to record a liability means that expenses may also be understated, leading to an overstatement of net income since expenses decrease net income when recognized.

Failure to Record a Liability Will Probably