Regions Inc.pays its rent of $60000 annually on January 1 and makes monthly adjustments.If the February 28 monthly adjustment for prepaid rent is omitted which of the following are true?
A) Failure to make the adjustment does not affect the February financial statements.
B) Expenses will be overstated by $5000 and net income and stockholders' equity will be understated by $5000.
C) Assets will be overstated by $10000 and net income and stockholders' equity will be understated by $10000.
D) Assets will be overstated by $5000 and net income and stockholders' equity will be overstated by $5000.
Correct Answer:
Verified
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