Final answer:
The correct answer is that total liabilities would be overstated due to the failure to record the earned portion of unearned service revenues. This adjustment should be completed in order to provide accurate financial statements.
Step-by-step explanation:
If the accountant of Omega Consulting, Inc. failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year, the correct statement is that the total liabilities will be overstated. This is because the revenue has already been earned, and thus, it should be recognized as such. Without the adjustment, the unearned revenue account would still reflect a liability that no longer exists because the services have been provided.
Regarding the reference information provided:
- The money listed under assets on a bank balance sheet might not actually be in the bank because these figures include loans made by the bank, which are with debtors, and securities such as U.S. Treasury bonds.
- Buying loans in the secondary market can depend on the risk profile of the borrower, changes in the economy-wide interest rates, and the current financial status of the borrower.
In conclusion, it is essential to reflect revenue accurately once it is earned to avoid misstating financial statements.