A company forgot to record accrued and unpaid wages of $500,000 at the end of period. What world be the impact of this oversight? a. Understate net income by $500,000. b. Overstate net income by $500,000. c. Have no effect on net income. d. Understate assets by $500,000.

A company forgot to record accrued and unpaid wages of $500,000 at the end of period. What world be the impact of this oversight? a. Understate net income by $500,000. b. Overstate net income by $500,000. c. Have no effect on net income. d. Understate assets by $500,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A company forgot to record accrued and unpaid wages of $500,000 at the end of period. What
world be the impact of this oversight?
a. Understate net income by $500,000.
b. Overstate net income by $500,000.
c. Have no effect on net income.
d. Understate assets by $500,000.

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