if adjusting entries are not prepared, which financial statements are misstated? a. statement of retained…

if adjusting entries are not prepared, which financial statements are misstated? a. statement of retained earnings only b. balance sheet only c. income statement, balance sheet and statement of retained earnings d. income statement only

if adjusting entries are not prepared, which financial statements are misstated? a. statement of retained earnings only b. balance sheet only c. income statement, balance sheet and statement of retained earnings d. income statement only

Answer

Brief Explanations:

Adjusting entries affect revenues, expenses (income statement), assets, liabilities (balance sheet). Net income (from income statement) impacts retained earnings (statement of retained earnings). So all three statements are affected.

Answer:

C. income statement, balance sheet and statement of retained earnings