In 2019, Milford Corporation Determined That It Overstated Salaries Payable

question 36

Multiple Choice

In 2019, Milford Corporation determined that it overstated salaries payable and salaries expense by $20,000 in 2018. In 2019, which of the following accounts will have to be credited to correct this error?

• A) Salaries and Wages Payable.
• B) Salaries and Wages Expense.
• C) Retained Earnings.
• D) Income Summary.

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Definitions:

Total Assets

The sum of all assets owned by a company, including cash, inventory, property, and equipment.

Operating Cash

Cash generated from a company's normal business operations.

Investing Activities

Financial transactions involving the acquisition or disposal of long-term assets or other investments not included in cash equivalents.

Financing Activities

Transactions involving raising funds for the company through borrowing or issuing equity.