# Question

Examine the adjusting entries provided in Exercise P3-11. Indicate the impact (overstated, understated, no effect) that not making each of the entries would have on the following financial ratios: current ratio, debt-to-equity ratio, profit margin ratio, and return on equity. Assume that the current ratio and debt-to-equity ratio are greater than one and the profit margin ratio and return on equity are less than one before each of the adjusting entries is considered.

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