At the end of the current year,the accountant for Navistar Graphics forgot to make an adjusting entry to accrue Wages payable to the company's employees for the last week in December.The wages will be paid to the employees in January.Which of the following is one of the effects of this error?
A) Net income is overstated.
B) Liabilities are overstated.
C) Net income is understated.
D) Expenses are overstated.

Question

Quizplus · Accepted Answer

By not accruing wages payable, the company fails to recognize an expense that was incurred in the current year, leading to an overstatement of net income. Expenses are understated, and liabilities (wages payable) are also understated, not overstated.

At the End of the Current Year,the Accountant for Navistar