Exercise asked you to write adjusting/correcting entries for transactions (a) through (i). In this problem, consider the effect on the current ratio and return on sales if the adjusting/correcting entries were not made. Indicate whether the failure to record the adjusting/correcting entry will result in these ratios being understated (U), overstated (O), or no effect (N). If additional information is necessary before you can provide the correct response, indicate with (I). Prior to the adjusting entry, the current ratio exceeds 1.0 and the company operated at a profit.

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Current Ratio Return on Sales