QUESTION 3 Failing to make an adjusting entry O either overstates or understates net income; the effect depends on which entry was omited O overstates net income O understates net income O has no effect on net income QUESTION 7 As of year end, your firm had completed $4,000 of work for a client, but had received only $1,500 in payment The only thing you have recorded is a credit to the Revenue account for the $1,500 received. If your firm uses the cash basis, by what amount must the balance in the Revenue account be adjusted at year end? $4,000 O $2,500 O $1,500