At the End of the Fiscal Year, the Usual Adjusting

question 21

Multiple Choice

At the end of the fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted.Which of the following statements is true?

• A)Salary Expense for the year is overstated.
• B)Liabilities at the end of the year are understated.
• C)Assets at the end of the year are understated.
• D)Shareholders' equity at the end of the year is understated.

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Definitions:

Interest Costs

The total cost incurred by borrowing funds, expressed as the interest rate multiplied by the principal over a given period.

Percentage Discount

A percentage discount refers to a reduction in price on goods or services based on a specified percentage of the original price.

Periodic Interest Rate

The interest rate applied to a loan or investment for a specific period, shorter than a year, such as monthly or quarterly.

Annuity

An annuity is a financial offering that ensures a regular payout to an individual, chiefly employed as a means of financial support for retired persons.