Failure to prepare an adjusting entry at the end of the period to record an accrued expense would cause

Question

Quizplus · Accepted Answer

Failure to prepare an adjusting entry for an accrued expense would result in an understatement of expenses and liabilities. The expense has been incurred but not yet paid or recorded, so it should be recognized to ensure that the financial statements are accurate and complete. Ignoring the expense would cause the expense and the related liability to be understated, which would affect the overall financial position of the company.

Failure to Prepare an Adjusting Entry at the End of the Period