A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would Understate net income by $350,000. Overstate net income by $350,000. Have no effect on net income. Overstate assets by $350,000. Understate assets by $350,000.

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Answer 1

Textbook Question

Chapter 3, Problem 1MCQ

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would

Understate net income by $350,000.
Overstate net income by $350,000.
Have no effect on net income.
Overstate assets by $350,000.
Understate assets by $350,000.

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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Selected comparative financial statements of Korbin Company follow. Sales KORBIN COMPANY Comparative Income Statements For Years Ended December 31 2021 2020 $ 512,008 $ 392,240 2019 $ 272,200 Cost of goods sold 308,229 245,542 174,208 Gross profit 203,779 146,698 97,992 Selling expenses 72,705 54,129 35,930 Administrative expenses 46,081 34,517 22,593 Total expenses 118,786 88,646 58,523 Income before taxes .84,993 58,052 39,469 Income tax expense 15,809 11,901 8,012 Net income $ 69,184 $ 46,151 $ 31,457 KORBIN COMPANY Comparative Balance Sheets Assets Current assets Long-term investments Plant assets, net Total assets Liabilities and Equity Current liabilities Common stock Other paid-in capital Retained earnings December 31 2021 2020 2019 $ 54,370 0 $ 36,390 600 $ 48,645 3,870 99,436 90,776 53,339 Total liabilities and equity $ 153,806 $ 127,766 $ 105,854 $ 22,456 $ 19,037 $ 18,524 68,000 68,000 50,000 8,500 8,500 5,556 54,850 32,229 31,774 $ 153,806 $ 127,766 $ 105,854

provide correct answer me

Answer 2

Textbook Question

Chapter 3, Problem 1MCQ

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would

Understate net income by $350,000.
Overstate net income by $350,000.
Have no effect on net income.
Overstate assets by $350,000.
Understate assets by $350,000.

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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Answer 3

Textbook Question

Chapter 3, Problem 1MCQ

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would

Understate net income by $350,000.
Overstate net income by $350,000.
Have no effect on net income.
Overstate assets by $350,000.
Understate assets by $350,000.

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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Answer 4

Textbook Question

Chapter 3, Problem 1MCQ

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would

Understate net income by $350,000.
Overstate net income by $350,000.
Have no effect on net income.
Overstate assets by $350,000.
Understate assets by $350,000.

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

Answer 8

Expert Solution & Answer

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Accrued and unpaid wages:

These wages refer to those wages which are due but have not been paid off duly. Under the accumulation basis of accounting, the outstanding wages that have been earned should be entered as the wages expenditure and the wages payable or accumulated wages owed.

The effect of the missing record.

Answer 12

Explanation of Solution

Option b, overstate net income by $350,000, is correct.

b.

The rectifying adjustment entry to be recorded for the missing record of accrued and unpaid employee wages is to debit the wages expense and credit the wages payable. When this entry is made, the net income is overstated as the wages expense is a revenue statement account and wages payable is a current accountability account that is stated on the balance sheet.

a.

By the adjusting entry, the wages expense is debited and the wages payable is credited. This would result in the overstating of the net income not understating it.

c.

The wages expense records a debit balance and wages payable a credit balance. The wages payable is stated on the balance sheet and by this entry, the net income records an increase. Thus, it is wrong that there is no effect on the net income.

d.

The adjustment entry made to record the missing balance of accrued and unpaid employee wages is by debiting the wages expense and crediting the wages payable. This will not affect the assets. So, the assets will not be overstated.

e.

The adjustment entry made does not affect the balance of the assets as wages expense is an expense account and wages payable is a liability account. Thus, the assets are not understated.

Thus, option b is correct.

Answer 13

Ch. 3 - A company forgot to record accrued and unpaid...Ch. 3 - Prior to recording adjusting entries, the Supplies...Ch. 3 - Prob. 3MCQ Ch. 3 - On November 1, Stockton Co. receives $3,600 cash...Ch. 3 - Prob. 5MCQ Ch. 3 - Prob. 1DQ Ch. 3 - Prob. 2DQ Ch. 3 - Prob. 3DQ Ch. 3 - Prob. 4DQ Ch. 3 - Prob. 5DQ

A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would Understate net income by $350,000. Overstate net income by $350,000. Have no effect on net income. Overstate assets by $350,000. Understate assets by $350,000.

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