1.If Bee Corp. fails to adjust the Deferred Rent account for rent that has been earned, what effect will this have on that month's financial statements?

Question 2Select one:

A.

Liabilities will be overstated and revenues will be understated.

B.

Liabilities will be understated and revenues will be understated.

C.

Assets will be overstated and revenues will be understated.

D.

Assets will be understated and revenues will be understated

Please explain me in details.

2.If XYZ Corp. fails to adjust the Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements?

A.

Assets will be overstated and net income and shareholders' equity will be overstated.

B.

Assets will be overstated and net income and shareholders' equity will be understated.

C.

This will have no effect on the financial statements.

D.

Expenses will be overstated and net income and shareholders' equity will be understated

Need a detailed explanation please

Answer rating: 100% (QA)

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