In preparing its 2012 adjusting entries, Rainer Ltd. forgot to make an adjustment for services rendered to customers who

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answerhappygod
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In preparing its 2012 adjusting entries, Rainer Ltd. forgot to make an adjustment for services rendered to customers who

Post by answerhappygod »

In preparing its 2012 adjusting entries, Rainer Ltd. forgot to
make an adjustment for services rendered to customers who had paid
in advance the previous period. As a result:
Multiple Choice
2012 net income is overstated, the balance in Retained Earnings
is overstated and assets are correctly stated
2012 net income is overstated, the balance in Retrained Earnings
is overstated and assets are overstated
2012 net income is understated, the balance in Retained Earnings
is understated and assets are understated
2012 net income is understated, the balance in Retained Earnings
is understated and liabilities are understated
None of the other alternatives are correct
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