At the End of the Fiscal Year, the Usual Adjusting

question 182

Multiple Choice

At the end of the fiscal year, the usual adjusting entry to accrue wages due on the last day of the fiscal period was omitted. Which of the following is true?

• A) total assets will be understated at the end of the current year
• B) the balance sheet and income statement will be misstated but the statement of stockholders' equity will be correct for the current year
• C) net income will be overstated for the current year
• D) total assets and total liabilities will be understated

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Definitions:

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, usually for managing liquidity.

Disbursements

Payments made by a business, often related to its operational expenses.

Financing

The process of providing funds for business activities, making purchases, or investing.

Minimum Cash Balance

The lowest amount of cash that a company or individual seeks to maintain on hand to meet immediate expenses.