Question

In: Accounting

The adjusting entry for accrued fees was omitted at the end of the current year.


The adjusting entry for accrued fees was omitted at the end of the current year. Indicate which items will be in error, because of the omission, on (a) the income statement for the current year and (b) the balance sheet at the end of the year. Also indicate whether the Items in error will be overstated or understated. 


a. Income Statement 

Revenues 

Expenses 

Net Income 

b. Balance Sheet 

Assets 

Liabilities 

Owner's equity

Solutions

Expert Solution

a. Income Statement
Particulars Error in Item Understated/Overstated
Revenues Rent revenue Understated
Expenses None None
Net Income Net Income Understated
b. Balance Sheet
Particulars Error in Item Understated/Overstated
Assets None None
Liabilities Unearned Rent Overstated
Owner's Equity Owner's Equity Overstated

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