At the End of 2017, the Payroll Supervisor for Claro

question 15

Multiple Choice

At the end of 2017, the payroll supervisor for Claro, Inc. failed to accrue $24,790 in commissions for the outside salespersons. The cost was recorded in 2018 when the commissions were paid and Commission Expense was debited and Cash credited for the full amount. The error was not discovered until late in 2018 while reconciling year-end expenses for 2018. What is the proper treatment to correct the error? (Ignore income taxes.)

• A) Do nothing, the error has counterbalanced.
• B) Accrue $24,790 in Commission Expense for 2018.
• C) Debit 2018 beginning Retained Earnings and credit Commission Expense for $24,790.
• D) There is no error in either year because the commissions are recorded when paid.

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Definitions:

Liberals And Conservatives

Terms used to describe the political spectrum, with liberals generally favoring progress, reform, and civil liberties, and conservatives typically supporting tradition, stability, and authority.

Earned

Money obtained in return for labor or services provided.

Public Assistance

Government programs designed to provide financial or other aid to individuals or groups in need.

Permanent Underclass

A segment of the population that experiences persistent poverty and social disadvantages, making upward mobility difficult.