How does failure to record accrued revenue distort the financial statements?

It understates revenue and current assets

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It understates revenue and current liabilities

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It overstates revenue and current liabilities

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None of the above

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Solution

The correct option is A
It understates revenue and current assets

It understates revenue and current assets.

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Similar questions

Q. The accounting concept that refers to the tendency of accountants to resolve uncertainty and doubt in favor of understating assets and revenues and overstating liabilities and expenses is known as________.

Q. The accounting principle that confirm to the tendency of accountants to resolve uncertainty and doubt in favor of understating assets and revenues and overstating liabilities and expenses is known as ____________.

Determine working capital turnover ratio if, current assets is Rs 1,50,000, current liabilities is Rs 1,00,000 and revenue from operations is Rs 3,00,000.

Q. From the following calculate:

(a) Current Ratio; and
(b) Working Capital Turnover Ratio.

		₹
(i)	Revenue from Operations	1,50,000
(ii)	Total Assets	1,00,000
(iii)	Shareholders' Funds	60,000
(iv)	Non-current Liabilities	20,000
(v)	Non-current Assets	50,000

Q. Revenue from Operations: Cash Sales ₹ 5,00,000; Credit Sales ₹ 6,00,000; Sales Return ₹ 1,00,000. Current Assets ₹ 3,00,000; Current Liabilities ₹ 1,00,000. Calculate Working Capital Turnover Ratio.

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How does failure to record accrued revenue distort the financial statements?

The correct option is A It understates revenue and current assets It understates revenue and current assets.

The correct option is A
It understates revenue and current assets

It understates revenue and current assets.