Which of the following errors would most likely lead to an overstatement of income?
A)Recording revenue next period when the cash is collected although it is earned in the current year
B)Recording an expense incurred this year when the cash is paid next year
C)Failure to adjust deferred rent revenue account for the portion of rent earned this year
D)Failure to adjust prepaid expenses account for the portion of insurance expired this year

Question

Quizplus · Accepted Answer

Failure to adjust prepaid expenses for the portion of insurance expired this year would result in expenses being understated, leading to an overstatement of income.

Which of the Following Errors Would Most Likely Lead to an Overstatement