Due to an oversight, the company bookkeeper made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31. This oversight would:
A)Have no effect on profit
B)Understate profit by $24,000.
C)Have no effect on the balance sheet.
D)Overstate profit by $24,000.
E)Overstate liabilities.

Question

Quizplus · Accepted Answer

If the bookkeeper made no adjusting entry for the accrued and unpaid employee wages, it means that the expense for these wages was not recorded in December, resulting in an overstatement of profit for the period. Therefore, the correct answer is D, as the oversight would overstate profit by $24,000.

Due to an Oversight, the Company Bookkeeper Made No Adjusting