Understating expenses occurs by:
A)omitting depreciation expense at the end of the year.
B)recording depreciation expense twice at the end of the year.
C)recording depreciation over an estimated life of an equipment.
D)paying in advance for insurance and creating a prepaid insurance account.

Question

Quizplus · Accepted Answer

Understating expenses can occur by omitting depreciation expense at the end of the year, as it results in lower reported expenses and higher net income.

Understating Expenses Occurs By