Failure to record the expiration of a prepaid asset account will
A)overstate assets.
B)understate assets.
C)overstate liabilities.
D)understate liabilities.
E)understate net income.

Question

Quizplus · Accepted Answer

Failing to record the expiration of a prepaid asset results in not recognizing the expense associated with the use of that asset. This means the asset account remains higher than it should be, leading to an overstatement of assets on the balance sheet.

Failure to Record the Expiration of a Prepaid Asset Account