A company recorded office supplies in an asset account when the supplies were purchased.Failure to take inventory and make an adjusting entry will result in an
A)understatement of liabilities.
B)understatement of owner's equity.
C)understatement of assets.
D)overstatement of owner's equity.

Question

Quizplus · Accepted Answer

Failing to adjust for supplies used will mean expenses are understated, which in turn overstates net income and thus owner's equity.

A Company Recorded Office Supplies in an Asset Account When