The accountant for Duman Legal Services failed to make an adjusting entry for supplies inventory that had been used for the year. Which of the following is true?
A) Total revenue is overstated.
B) Total revenue is understated.
C) Total expenses are overstated.
D) Total expenses are understated.

Question

Quizplus · Accepted Answer

Failing to adjust for used supplies inventory means that the expense related to these supplies has not been recorded. This results in total expenses being reported as less than they actually are, hence they are understated.

The Accountant for Duman Legal Services Failed to Make an Adjusting