Question

If an adjustment for $7,500 in accrued revenues is omitted, how will this affect the financial statements?

a. There will be no effect on the financial statements.
b. Net income will be understated by $7,500.
c. Accounts Receivable will be overstated by $7,500.
d. Net income will be overstated by $7,500.

Answer 1

The right answer for the question that is being asked and shown above is that: "c. Accounts Receivable will be overstated by $7,500. " If an adjustment for $7,500 in accrued revenues is omitted, the affect that the financial statements is that accounts Receivable will be overstated by $7,500.