When a credit sale is omitted, the effect on the accounting equation is:

Question

BlackTom AI · Accepted Answer

To analyze the effect of omitting a credit sale, we must consider what the sale would normally impact in the accounting equation.

Option a: No overall effect. This is incorrect because omitting a credit sale removes both revenue recognition and the corresponding asset (accounts receivable) that would have been recorded. That creates an imbalance rather than no effect.

Option b: Revenues will be understated and Assets will be overstated. This is not plausible because omitting the sale would not cause assets to rise; rather, it would fail to record the anticipated asset (accounts receivable) from the sale, so assets would not be overstated.

Option c: Revenues and Assets will be overstated. This cannot be correct because omitting the sale means we are not recognizing revenue or the asset; that would not push either measure upward.

Option d: Revenues and Assets will be understated. This aligns with the normal consequence of omitting a credit sale: we fail to record earned revenue and the associated accounts receivable, causing both revenues and assets to be understated.

In sum, the omission prevents both the revenue recognition and the asset creation that would accompany a credit sale, resulting in understatement of both components of the equation.

FNDN Accounting 2025 STD O2

When a credit sale is omitted, the effect on the accounting equation is:

查看解析

登录即可查看完整答案

类似问题

Which of the following statements correctly summarize what a balance sheet is?

On a balance sheet, if the assets are $760,000 and the liabilities are $530,000, what is the owner's equity?

On a statement of financial position, I would expect to see the following equation:

If A = $100, L = $25, what does OE =?

Assets minus Liabilities equals:

Which of the following correctly states the balance sheet equation?

The balance sheet equation states:

The balance sheet equation states that assets = liabilities owners’ equity. Which of the following best describes the logic behind this equation?

更多留学生实用工具

考试浏览器助手

风格化写作助手

论文查重助手

文献引用助手

课堂转译助手

课堂笔记助手

Quiz搜索助手

学校历年真题

智能刷题助手

智能匹配练习

希望你的学习变得更简单