At the End of the Fiscal Period, Wilf Carter Services

question 51

Multiple Choice

At the end of the fiscal period, Wilf Carter Services omitted the adjusting entry for amortization on equipment. The effect of this error on the financial statements is to:

• A)understate liabilities.
• B)understate owner's equity.
• C)overstate expenses.
• D)overstate assets.

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Definitions:

Vicarious Liability

The liability or responsibility imposed on a person, a party, or an organization for damages caused by another; most commonly used in relation to employment, with the employer held vicariously liable for damages caused by its employees.

Principal-Employer

The party in a contractual relationship who has the right to control the work of the employee or agent and is responsible for their actions.

Agent-Employee

An individual who performs tasks on behalf of another, the principal, in an employment context, with both agency and employment law aspects governing the relationship.

European Union Regulations

Laws that are directly applicable and binding in all member states of the European Union without the need for individual countries to enact additional legislation.