accrued salaries at the end of the period is inadvertently omitted, both liabilities and stockholders' equity will be understated for the period.
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True or False.
If the adjustment for accrued salaries at the end of the period is inadvertently omitted, both liabilities and
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- Failure to record accrued salaries at the end of an accounting period would not result in a. Understated expenses b. Understand liabilities c. Overstated retained earnings d. Understated net incomeAn adjusting journal entry to recognize accrued salariespayable would cause which of the following?a. A decrease in assets and stockholders’ equity.b. A decrease in assets and liabilities.c. An increase in expenses, liabilities, and stockholders’equity.d. An increase in expenses and liabilities and a decreasein stockholders’ equity.A company fails to record accrued wages for the current year. Which of the following statement is true? O Retained earnings for the current year is overstated. O Net income for the current year is correct. O Retained earnings for the current year is understated. O Net income for the current year is understated.
- After the break in the MCC caused by using up retained earnings, the schedule can be expected to remain flat indefinitely. Is that statement right or wrong? If wrong, explain what can be expected to happen to the MCC and why.An adjusting entry to recognize accrued salaries payable would cause which of the following? Group of answer choices A. An increase in expenses and liabilities. B. A decrease in liabilities and an increase in expenses. C. A decrease in assets and liabilities. D. An increase in revenues and liabilities.If the statement of financial position error is discovered in the year of error, what action is to be done by the entity? Ignore the Reclassify the item to its proper real account. Adjust the effect to the retained earnings account. Reclassify the item to nominal account.
- 1.Provide an argument explaining why expenses that were inadvertently omitted in a previous year should be debited directly to retained earnings in the following period in which the error is discovered, rather than recognising them in the profit or loss in the period when the error was discovered.Which of the following is the incorrect effect of counterbalancing errors?a. None of the statements is incorrect. b. The statement of financial position at the end of the first period is incorrect. c. The income statements for three successive periods are incorrect. d. The statements of financial position at the end of the second period is correct.A. By how much would the December 31, 2021 retained earnings be misstated if no adjustments were made for the above errors? B. Compute for the adjusted net income for the year 2021.
- What is the effect of omission of prepaid expense in retained earnings at the end of year 2? Group of answer choices a. No effect b. Cannot be determined from the given information c. Understated d. OverstatedIf the adjusting entry to accrue interest on a note receivable is omitted, thena. liabilities are understated, net income is overstated, and stockholders’ equity isoverstated.b. assets, net income, and stockholders’ equity are understated.c. assets, net income, and stockholders’ equity are overstated.d. assets are overstated, net income is understated, and stockholders’ equity is understatedTRUE OR FALSE? A prior period error is not included in profit or loss but treated as an adjustment of the beginning balance of retained earnings.
