At the End of December 2020 When Preparing the Financial

question 23

Essay

At the end of December 2020 when preparing the financial statements, the accountant forgot to make the adjusting entry related to the depreciation of the capital assets.
Instructions
Explain the effect of the error on the Statement of Income and Statement of Financial Position for 2020 and 2021. Assume the error was not discovered and was not corrected in 2021.

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Definitions:

Wage Rate

The amount of compensation a worker receives for performing a service, typically measured per hour or unit of work.

Employment

The state of having a paid job or being engaged in a productive activity.

Marginal Wage Cost

The additional cost incurred by an employer for hiring one more unit of labor.

Wage Rate

The amount of money paid to an employee by an employer in exchange for work performed, usually expressed per hour, day, or piece.