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

The omission of the adjusting entry for depreciation on equipment will result in an overstatement of net profit for the current year because the expense was not recognized. This will affect both the profit and loss statement and the balance sheet. However, total assets and total liabilities will not be affected.

At the End of the Financial Year, the Usual Adjusting