A company recorded the $27,000 adjusting entry for the earning of rent received in advance by debiting revenues and crediting expenses $27,000. Which of the following is/are overstated $54,000? A. expenses B. liabilities C. revenues D. all of these E. none of these

A company recorded the $27,000 adjusting entry for the earning of rent received in advance by debiting revenues and crediting expenses $27,000. Which of the following is/are overstated $54,000? A. expenses B. liabilities C. revenues D. all of these E. none of these

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 8RE: At the end of 2019, Framber Company received 8,000 as a prepayment for renting a building to a...

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

A company recorded the $27,000 adjusting entry for the earning of rent received in advance by debiting revenues and crediting expenses $27,000. Which of the following is/are overstated $54,000?

A. expenses

B. liabilities

C. revenues

D. all of these

E. none of these

Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.

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