If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be an:
A)Overstatement of net income.
B)Overstatement of assets.
C)Overstatement of liabilities.
D)Overstatement of equity.
E)Understatement of liabilities.

Question

Quizplus · Accepted Answer

Failing to adjust the Unearned Management Fees account means liabilities are overstated because the revenue earned is not recognized, leaving the liability account balance higher than it should be.

If a Company Failed to Make the End-Of-Period Adjustment to Remove