QUESTION $4$

$2$ points

On April $1,2015,$ ABC Inc. received an advance payment from a tenant in the amount of $$408,000$ that represented five years of rent. When ABC received the cash payment, the entry was recorded with a credit to

a nominal account. ABC's year end is December $31.$ Sadly, ABC was understaffed at the time and no adjusting entries were made in $2015,2016,$ or $2017.$ How did this error affect $2016$ and $2017$ financial

statements?

Answer Format: Use O for overstated, U for Understated, and NE for no effect. Do not space between the O$/$U$/$NE and the dollar amount of the error. $($Example: If Assets are Over by $$2,000,$ record your answer as

O$2000)$