Question

If the rent earned is properly recorded
and there is no understatement or
overstatement is examined as per---​

Answer 1

The answer is as follows:

Explanation:

This would result in:

• By including phoney asset expenses or artificial revenues, overstating assets and revenues inaccurately shows a financially stronger organisation.
• Excluding costs or financial responsibilities results in understated liabilities and expenses.
• Both techniques result in the company's equity and net value increasing.

• If a corporation overstates assets or understates liabilities, the net income will be inflated,
• which will be carried over to the balance sheet as retained earnings, inflating shareholders' equity.