In 2011, Milford Corporation determined that it overstated salaries payable and salaries expense by $20,000 in 2010.In 2011, which of the following accounts will have to be credited to correct this error?

Question

Quizplus · Accepted Answer

The overstatement of salaries payable and salaries expense in 2010 would have resulted in an understatement of net income and retained earnings. To correct this, Retained Earnings should be credited in 2011 to adjust for the prior period error.

In 2011, Milford Corporation Determined That It Overstated Salaries Payable