The entry to adjust salaries was done twice. This error would cause
A) liabilities to be understated.
B) liabilities to be overstated.
C) expenses to be understated.
D) Capital to be overstated.

Question

Quizplus · Accepted Answer

The entry to adjust salaries was done twice, which means that the salaries expense was recorded twice, leading to an overstatement of expenses and an overstatement of liabilities (as salaries payable will be overstated). This results in an incorrect balance sheet and income statement.

The Entry to Adjust Salaries Was Done Twice