At the end of the current year,the accountant for Computer Graphics Company forgot to make an adjusting entry to accrue Wages Payable for 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 an effect 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 for wages payable at the end of the year, the company fails to recognize an expense that was incurred in that year. This results in the company's net income being overstated because expenses are understated.

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