1.
Wages payable represents an accrual.
Correct option is D.
Accrual refers to the expenses which have been incurred but not yet paid. Hence, accrued expense are liabilities.
2.
If the adjusted for prepaid expenses is not recorded, it will the following effects:
- Assets will be understated.
- Expenses will be understated.
- Net income will be overstated.
- Owners equity will be overstated.
Hence, Correct option is C.
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