A company made no adjusting fo
A company made no adjusting for accrued and unpaidemployeed salaries of $9000 on december 31. which of the followingstatement is true?a)it will overstament assets and liabilities by $9000b)it will understate expenses and overstate Net income by$9000c) it will have no effect on incomed) it will understate assets by $9000
Answer:
Answer for the question is –
b) It will understate expenses and overstate Net incomeby $9000.
1. Journal Entry –
In the above Journal Entries Salaries expense account is gettingdebited and Salaries Payable account is getting credited.
Income Statement account is getting affected and Liabilities isgetting added.
Impact in the Income statement is it will add the expenses andreduced the income. In case of Balance Sheet it will add to theliabilities.
Conclusion –
a) It will overstatement assets and liabilities by $9000 –Wrong because Assets is not getting affected due to theentry.
b) It will understate expenses and overstate Net income by $9000- Correct
c) It will have no effect on income – Wrong thistransaction will affect income.
d) It will understate assets by $9000 – Wrong becauseassets is not affected due to this transaction.
"Our Prices Start at $11.99. As Our First Client, Use Coupon Code GET15 to claim 15% Discount This Month!!"
