Question
At the end of 2020, Digit Consulting did NOT make the adjusting entry indicated below. Indicate the effect of the error on 2020 Net Income,
At the end of 2020, Digit Consulting did NOT make the adjusting entry indicated below. Indicate the effect of the error on 2020 Net Income, Assets, Liabilities, and Owners Equity (on December 31, 2020). Please specify the dollar effect of the error. Use O for overstate, U for understate, and NE for no effect. Assume each error is independent of the others.
| Error | Net Income | Assets | Liabilities | Owners Equity |
| Entry to record the expired portion of a three-year life insurance policy paid for on April 1, 2019 for 60,000 and charged to a permanent account. The company forgot to make the adjusting entries in BOTH 2019 and 2020. |
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