10) at the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted…

10) at the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. which of the following statements is true? f) net income will be overstated for the current year. g) total assets will be understated at the end of the current year. h) the balance sheet and income statement will be misstated but the retained earnings statement will be correct for the current year. j) total expenses will be overstated at the end of the current year.

10) at the end of the fiscal year, the usual adjusting entry for depreciation on equipment was omitted. which of the following statements is true? f) net income will be overstated for the current year. g) total assets will be understated at the end of the current year. h) the balance sheet and income statement will be misstated but the retained earnings statement will be correct for the current year. j) total expenses will be overstated at the end of the current year.

Answer

Brief Explanations:

Depreciation is an expense. When the adjusting - entry for depreciation on equipment is omitted, expenses are understated. Since Net Income = Revenues - Expenses, understating expenses overstates net income. Assets are also overstated because the accumulated depreciation (a contra - asset account) is not increased. The balance sheet and income statement are misstated, and since net income affects retained earnings, the retained earnings statement is also misstated.

Answer:

f) Net income will be overstated for the current year.