At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. Which of the following statements is true?
A) Salary Expense for the year was understated.
B) The total of the liabilities at the end of the year was overstated.
C) Net income for the year was understated.
D) Owner's equity at the end of the year was understated.

Question

Quizplus · Accepted Answer

When the adjusting entry for accrued salaries is omitted, Salary Expense is understated because the expense that should have been recorded is not, leading to an overstatement of net income and owner's equity.

At the End of the Fiscal Year, the Usual Adjusting