The accountant of Linda Legal Services failed to make an adjusting entry for supplies that had been used for the year. Assume the supplies were initially recorded as an asset. Which of the following statements is true?
A)The total liabilities will be overstated.
B)The equity will be understated.
C)The total assets will be overstated.
D)The total assets will be understated.

Question

Quizplus · Accepted Answer

The supplies were initially recorded as an asset, and failing to adjust for supplies used means that the asset account is not reduced, leading to an overstatement of total assets.

The Accountant of Linda Legal Services Failed to Make an Adjusting