If an adjustment for $8,600 in accrued revenues is omitted, how will this affect the financial...

Question

Question

business accounting

Answer 1

Answer #1

The adjustment for accrued revenues is

Accrued revenues A/C ....... Dr $8,600

TO Income A/C $8,600

Here the accrued income will be posted on the asset side of balance sheet and Income will be posted on the credit side of Income statement.

So by omission of Accrued revenues, Income will be understated and accounts receivable will be under stated by $8,600

Ans will be

A. Net income will be understated by $8,600

Answer 2

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