Summary of Adjusting Entries Video Lessons

Concept

# 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

###### 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

What scientific concept do you need to know in order to solve this problem?

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