If a Company Fails to Accrue the Appropriate Wage Expense

question 96

Multiple Choice

If a company fails to accrue the appropriate wage expense at the end of the accounting period,

• A)owners' equity and current assets will both be overstated
• B)current liabilities and current assets will both be understated
• C)net income will be overstated and current liabilities will be understated
• D)current assets will be overstated and net income will be understated

---

Definitions:

Arithmetic Operations

Fundamental mathematical operations including addition, subtraction, multiplication, and division.

Financial Mathematics

Financial mathematics is a field of applied mathematics concerned with financial markets, aiming at solving problems related to valuation, investment, and risk management.

Annuity Formula

A mathematical formula used to calculate the future value of an annuity or the payments required to meet a certain future value.

Compound Interest

Interest calculated on the initial principal, which also includes all of the accumulated interest from previous periods.