Failure to record the entry for accrued wages results in
A)wages payable being overstated.
B)net income being understated.
C)wages expense being understated.
D)total assets being understated.
E)total assets being overstated.

Question

Quizplus · Accepted Answer

Failure to record the entry for accrued wages would result in wages expense being understated because the expense has been incurred but not recorded in the books of accounts. This would lead to an understatement of total expenses and ultimately an understatement of net income. However, wages payable (liability) would be understated resulting in an overstatement of total assets.

Failure to Record the Entry for Accrued Wages Results in