Equity will be overstated because profit is overstated.
No they will be overstated as depreciation will not have been taken into account.
If inventory is understated, net income is also understated because cost of goods sold will be overstated
If adjusting entry not made then profit will be overstated while the expenses will be understated.
If an adjustment is needed for unearned revenues, the liability is overstated and the related revenue is understated before adjustment. Another word for revenue is income.
Understatement means any ledger showing less amount then actual due to any amount missing and overstatement means any ledger account is showing more amoun then actual due to double count or double record of any transaction.
No they will be overstated as depreciation will not have been taken into account.
If inventory is understated, net income is also understated because cost of goods sold will be overstated
net Accounts Receivable will be overstated.
If adjusting entry not made then profit will be overstated while the expenses will be understated.
Understated DefinedUnderstated amounts indicate a reported amount is not correct and the reported amount is less than the true amount.Overstated DefinedOverstated is the opposite of understated in accounting terminology. Accountants use this term to describe an incorrect reported amount that is higher than the true amount.
expenses understated and therefore net income overstated
unaffected
If an adjustment is needed for unearned revenues, the liability is overstated and the related revenue is understated before adjustment. Another word for revenue is income.
If Opening Stock is undervalued, this will result in your Cost of Sales being understated and therefore Gross and Net Profit being overstated. Of course, since Opening Stock in this period is the last period's Closing Stock, this would mean that Closing Stock in the last period was understated too, meaning that Net Profit in the last period was understated. That doesn't make it OK though!
Yes this is right statement as if some expenses are forgot to record it overstated the net income and reduces the expenses but in actual there is less net income then shown in income statement.
Understatement means any ledger showing less amount then actual due to any amount missing and overstatement means any ledger account is showing more amoun then actual due to double count or double record of any transaction.
Expenses are overstated and assets are overstated