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
a.
By the
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.
Want to see more full solutions like this?
Chapter 3 Solutions
CONNECT PLUS-FINANCIAL & MANAGERIAL AC
- Can you help me solve this general accounting question using the correct accounting procedures?arrow_forwardHorngren's Financial & Managerial Accounting: The Managerial Chapters, 8th Edition. E-M:9-14 Describing the balanced scorecard and identifying key performance indicators for each perspectiveConsider the following key performance indicators and classify each indicator according to the balanced scorecard perspective it addresses. Choose from the financial perspective, customer perspective, internal business perspective, and the learning and growth perspective. a.Number of customer complaintsb.Number of information system upgrades completedc.Residual incomed.New product development timee.Employee turnover ratef.Percentage of products with online help manualsg.Customer retentionh.Percentage of compensation based on performancei.Percentage of orders filled each weekj.Gross margin growthk.Number of new patentsl.Employee satisfaction ratingsm.Manufacturing cycle time (average length of production process)n.Earnings growtho.Average machine setup timep.Number of new customersq.Employee…arrow_forwardDo fast answer of this general accounting questionarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education





