The balance unearned rent account for Jones Co. as at 31st Dec. is 1,200. If
FINANCIAL
POST UTME OAU
The balance unearned rent account for Jones Co. as at 31st Dec. is 1,200. If Jones Co tailed !o record the adjusting entry for 600 of rent earned during December, the effect on the balance sheet and income statement for December is:
- A) Liabilities overstated: ?600; net income overstated: ?600
- B) Liabilities understated: ?600; net income understated ?600
- C) Asset understated: ?600; net income overstated ?600
- D) Liabilities overstated ?600; net income understated ?600
Correct Answer: D) Liabilities overstated ?600; net income understated ?600
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