When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of $65,000 had not been accrued at December 31 2021. If the error is not corrected, what is the effect on the 2021 and 2022 comparative financial statements? Question 11Answer a. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is understated in 2021 and overstated in 2022. b. Salaries and Wages Expense is overstated in 2021 and understated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. c. Salaries and Wages Expense is understated in 2021 and overstated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. d. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is overstated in 2021 and understated in 2022.
When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of $65,000 had not been accrued at December 31 2021. If the error is not corrected, what is the effect on the 2021 and 2022 comparative financial statements? Question 11Answer a. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is understated in 2021 and overstated in 2022. b. Salaries and Wages Expense is overstated in 2021 and understated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. c. Salaries and Wages Expense is understated in 2021 and overstated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. d. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is overstated in 2021 and understated in 2022.
When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of $65,000 had not been accrued at December 31 2021. If the error is not corrected, what is the effect on the 2021 and 2022 comparative financial statements? Question 11Answer a. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is understated in 2021 and overstated in 2022. b. Salaries and Wages Expense is overstated in 2021 and understated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. c. Salaries and Wages Expense is understated in 2021 and overstated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022. d. Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is overstated in 2021 and understated in 2022.
When preparing adjusting entries at December 31, 2022, DC Co. discovered that sales salaries of $65,000 had not been accrued at December 31 2021. If the error is not corrected, what is the effect on the 2021 and 2022 comparative financial statements?
Question 11Answer
a.
Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is understated in 2021 and overstated in 2022.
b.
Salaries and Wages Expense is overstated in 2021 and understated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022.
c.
Salaries and Wages Expense is understated in 2021 and overstated in 2022. Retained Earnings is overstated and total liabilities are understated in 2021 but properly stated in 2022.
d.
Salaries and Wages Expense and total liabilities are understated in 2021. Salaries and Wages Expense and total liabilities are overstated in 2022. Retained Earnings is overstated in 2021 and understated in 2022.
Definition Definition Entries made at the end of every accounting period to precisely replicate the expenses and revenue of the current period. This is also known as end of period adjustment. It can also refer to financial reporting that corrects errors made previously in the accounting period. Every adjustment entry affects at least one real account and one nominal account.
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