Asked in Business Accounting and Bookkeeping
If an adjusting entry is not made for an accrued revenue what will be overstated?
accrued revenue is acc. receivable control, which is an asset. if it is not made, the assets will decrease. Eq=A-L, A drop, and then Eq will decrease.
accrued revenue can be category of sales revenue too, so if sales drop, P=I-Ex,
P will decrease
the only thing will increase is L and Ex when comparing with A P or I.