Answer:
C. Total assets are overstated
Explanation:
Adjusting Entry for depreciation will be as follows
Dr. Depreciation Expense XXX
Cr. Accumulated Depreciation XXX
Accumulated Depreciation account is a contra account of long term asset and deducted from the Long term assets value. By missing the above transaction the accumulated depreciation will be understated and Total assets account will be overstated.
Answer:
The correct answer is letter "C": Total assets are overstated.
Explanation:
Depreciation expenses have an inverse effect on net income or total assets. If the accountant of a company did not record depreciation, there will be an imbalance in the total assets. Thus, the total assets will be overstated. An adjustment must be done so the balance of the debits and credits equals.
