Summary of Adjusting Entries Video Lessons

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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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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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