If A Company Fails To Adjust A Prepaid Expense Account
W hat happe ns if a company failed to adjust a Prepaid Expense is answered in t his b log post. Actually, whe n a company forgets to make an Adjustment of a prepaid expense, t he n assets are overstated / increased on b ala nce s heet / statement of financial position, which increased total assets in balance sheet, a nd expenses in Income Statement or Profit And Loss Account are understated w hich overstates the N et Income or N et Profit . T he adjusti ng entry to record a prepaid expense is s how n b elow: Expe nse a/c XXX Prep...