During the adjusting process two transactions were neglected or omitted. the first is for unearned rent revenue of which $540 was earned during the period, the second was for accrued interest payable of which $225 is owed for the period. as a result of these omissions (a) assets are overstated by $540. (b) these omissions would not affect the financial statements; the financial statements will be correct.(c) liabilities are overstated by $315. (d) revenue is overstated by $765. (e) net income is overstated by $225.

Two firms, a and b, each currently emit 100 tons of chemicals into the air. the government has decided to reduce the pollution and from now on will require a pollution permit for each ton of pollution emitted into the air. the government gives each firm 40 pollution permits, which it can either use or sell to the other firm. it costs firm a $200 for each ton of pollution that it eliminates before it is emitted into the air, and it costs firm b $100 for each ton of pollution that it eliminates before it is emitted into the air. after the two firms buy or sell pollution permits from each other, we would expect that firm a will emit a. 100 fewer tons of pollution into the air, and firm b will emit 20 fewer tons of pollution into the air. b. 20 more tons of pollution into the air, and firm b will emit 100 fewer tons of pollution into the air. c. 50 fewer tons of pollution into the air, and firm b will emit 50 fewer tons of pollution into the air. d. 20 fewer tons of pollution into the air, and firm b will emit 100 fewer tons of pollution into the air.