Question
39. The accountant of Omega Consulting failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end
39. The accountant of Omega Consulting failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true?
A.The total liabilities will be overstated.
B.The total assets will be overstated.
C.The total assets will be understated.
D.The total liabilities will be understated.
40.
Refer to the following trial balance.
| Debit | Credit | |
| Cash | $19,000 | |
| Accounts Receivable | 44,000 | |
| Merchandise Inventory | 64,000 | |
| Supplies | 16,000 | |
| Land | 320,000 | |
| Accounts Payable | $5,000 | |
| Notes Payable | 22,000 | |
| Owner, Capital | 341,000 | |
| Owner, Withdrawals | 3,000 | |
| Sales Revenue | 460,000 | |
| Sales Returns and Allowances | 9,000 | |
| Sales Discounts | 9,000 | |
| Cost of Goods Sold | 200,000 | |
| Salaries Expense | 17,000 | |
| Utilities Expense | 65,000 | |
| Rent Expense | 56,000 | |
| Interest Expense | 6,000 | ________ |
| Totals | $828,000 | $828,000 |
How much is the net sales revenue?
A.The total liabilities will be overstated.
B.The total assets will be overstated.
C.The total assets will be understated.
D.The total liabilities will be understated.
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Auditing Theory And Practice
Authors: Arun Kumar & Rachana Sharma
1st Edition
8171567207, 978-8171567201
