Question

Which of the following errors occur when an accountant does not record the entry to adjust accrued wages?

a.Overstatement of total liabilities in the balance sheet.

b.Understatement of Wages Expense account in the income statement.

c.Understatement of Accounts payable in the balance sheet.

d.Understatement of total assets in the balance sheet.

e.Overstatement of operating expense in the income statement.

Answer 1

Answer: b Understatement of Wages Expense account in the income statement

Explanation:

a.Overstatement of total liabilities in the balance sheet is incorrect because Understatement of total liabilities in the balance sheet .

b.Understatement of Wages Expense account in the income statement because of no entry for accrued wages. So, it is correct.

c.Understatement of Accounts payable in the balance sheet is incorrect because Understatement of wages payable in the balance sheet.

d. Understatement of total assets in the balance sheet is incorrect because No change of total assets in the balance sheet.

e.Overstatement of operating expense in the income statement is incorrect because Understatement of operating expense in the income statement