The accountant for Eagle Financial Services Company failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year.Which of the following statements is TRUE?
A) The total liabilities will be overstated.
B) The total liabilities will be understated.
C) The total assets will be overstated.
D) The total assets will be understated.

Question

Quizplus · Accepted Answer

Failing to record the telephone expenses means that the liabilities are understated because the company owes money for these expenses but has not recorded the obligation.

The Accountant for Eagle Financial Services Company Failed to Make