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

Question

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Failing to record an adjusting entry for an accrued expense at the end of the period would result in an understatement of expenses and an understatement of liabilities. This is because the expense has been incurred but not yet paid, and therefore should be recorded as an expense and a liability to reflect the outstanding amount owed. Failure to record this entry would result in inaccurate financial statements that do not reflect the true financial position and performance of the company.

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