Question: 1. At the end of February, the first month of the business year, the usual adjustment transferring rent earned to a revenue account from the unearned rent account was omitted. Indicate which items will be incorrectly stated, because of the error, on
(a) the income statement for February and
(b) the balance sheet as of February 28. Also indicate whether the items in error will be overstated or understated.
2. Does every adjustment have an effect on determining the amount of net income for a period? Explain.