In July 2019, Pog Farms received payment in advance from their customers in exchange for...
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Accounting
In July 2019, Pog Farms received payment in advance from their customers in exchange for a 1 year produce subscription. Pog Farms shipped boxes of produce to their customers at the end of every month in accordance to the purchase agreements. On September 31st 2019, when preparing Q3 financial statements, Pog Farms accountants forgot to undertake an adjusting entry to recognize the fulfillment of the subscription in Q3. What is the impact of this error on Pog Farms financial statements?
A. Assets are overstated
B. Revenue is understated
C. Assets are understated
D. Revenue is overstated
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