At the end of October, the first month of the business year, the usual adjusting entry transferring

Question:

At the end of October, the first month of the business year, the usual adjusting entry transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on
(a) The income statement for October and
(b) The as of October 31. Also indicate whether the items in error will be overstated or understated.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...