At year-end the bookkeeper forgot to accrue an income item. This will result in an:

Question

Quizplus · Accepted Answer

When an income item is not accrued, it means that the income is not recorded in the accounts. This results in the understatement of assets (since the receivable is not recognized), profit (because the income is not included in the profit calculation), and equity (since profit contributes to equity, an understatement of profit leads to an understatement of equity).

At Year-End the Bookkeeper Forgot to Accrue an Income Item