The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would cause

A. the period's net income to be overstated.

B. the period's net income to be understated.

C. the period end assets to be overstated.

D. None of the above

Question

Business

Dominic Patel

21 April, 15:55

The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would cause

A. the period's net income to be overstated.

B. the period's net income to be understated.

C. the period end assets to be overstated.

D. None of the above

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Answers (1)

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Marcos Ayala · Answer 1

The answer is B. This error causes an understatement of the period's net income. It is defined to be a rule of thumb that the net income understates in the over-state of expenses. A depletion of expenses overstates the net income.

The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would causeA. the period's net income to be overstated.B. the period's net income to be understated.C. the period end assets to be overstated.D. None of the above

The credit portion of the adjustment for the depletion of a coal mine was credited to the Coal Mine account. This error would cause

A. the period's net income to be overstated.

B. the period's net income to be understated.

C. the period end assets to be overstated.

D. None of the above