Problem: If Robert paid for 6 months of rent in advance on 7/1/16 for $4,800 ($800 per month). What would happen to the accounting equation if Robert forgot to make an adjusting entry on 12/31/16? a. Assets would be understated b. Assets would be overstated c. Liabilities would be understated d. Liabilities would be overstated
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Problem Details
If Robert paid for 6 months of rent in advance on 7/1/16 for $4,800 ($800 per month). What would happen to the accounting equation if Robert forgot to make an adjusting entry on 12/31/16?
a. Assets would be understated
b. Assets would be overstated
c. Liabilities would be understated
d. Liabilities would be overstated
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