If an adjusting entry is not made for an accrued revenue,

Name: If an adjusting entry is not made for an accrued revenue,
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Question

Quizplus · Accepted Answer

Without the adjusting entry for accrued revenue, the revenue that has been earned but not yet recorded will not be included in the financial statements. This omission leads to an understatement of both revenues and consequently, stockholders' equity, since net income (which includes revenues) is a component of stockholders' equity.

If an Adjusting Entry Is Not Made for an Accrued