At the end of the financial year,the usual adjusting entry for depreciation on equipment was omitted.Which of the following statements is true?

Question

Quizplus · Accepted Answer

If the adjusting entry for depreciation on equipment is omitted, the net profit will be overstated for the current year because the cost of the equipment has not been charged to expenses in the current year, resulting in a higher profit. However, this will not affect the total assets, total liabilities, or equity.

At the End of the Financial Year,the Usual Adjusting Entry