At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on
(a) the income statement for April and
(b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.

Question

At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on 
(a) the income statement for April and 
(b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.

Quizplus · Accepted Answer

The Answer of At the end of April, the first month of the company's year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on 
(a) the income statement for April and 
(b) the balance sheet as of April 30. Also indicate whether the items in error will be overstated or understated.

At the End of April, the First Month of the Company's