The failure to record an accrual adjustment relating to salaries and wages would not affect the:

Question

Quizplus · Accepted Answer

The statement of cash flows is not affected since adjusting entries do not involve the Cash account.The accrual of wages affects Salaries and Wages Expense (reported on the income statement)and Salaries and Wages Payable (reported on the balance sheet).Since Salaries and Wages Expense is affected,net income is also affected,and,in turn,Retained Earnings (reported on the statement of retained earnings)is affected.

The Failure to Record an Accrual Adjustment Relating to Salaries