Effect of omitting adjusting entry Accrued salaries owed to employees for August 30 and 31 are not considered in preparing the financial statements for the year ended August 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of August 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Owner's Equity

Effect of omitting adjusting entry Accrued salaries owed to employees for August 30 and 31 are not considered in preparing the financial statements for the year ended August 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of August 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Owner's Equity

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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