Southern Company's accountant failed to accrue as of 12/31/13 some employee fringe benefit program expenses that were incurred in 2013 and that will be paid in 2014. The result of this omission is to:

Question

Quizplus · Accepted Answer

The omission of accruing expenses results in understating 2013 expenses, which leads to overstating net income. Additionally, since the expenses were not recorded, the current liabilities are understated as the obligation to pay these expenses in the future is not reflected.

Southern Company's Accountant Failed to Accrue as of 12/31/13 Some