Multiple Choice
During Year 1,Bradley Corporation borrowed $20,000 from Fidelity Bank by signing a one-year,6% discount note.On December 31,Year 2 Bradley failed to make the adjusting entry to accrue the related interest.This error will cause:
A) Net income for Year 1 to be overstated and liabilities for Year 1 to be overstated.
B) Net income for Year 1 to be understated and net income for Year 2 to be overstated.
C) Net income for Year 1 to be understated and liabilities for Year 1 to be overstated.
D) Net income for Year 2 to be understated and liabilities for Year 1 to be understated.
Correct Answer:
Verified
Correct Answer:
Verified
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