At the End of the Current Year,the Accountant for Navistar

question 137

Multiple Choice

At the end of the current year,the accountant for Navistar Graphics forgot to make an adjusting entry to accrue Wages payable to the company's employees for the last week in December.The wages will be paid to the employees in January.Which of the following is one of the effects of this error?

• A) Net income is overstated.
• B) Liabilities are overstated.
• C) Net income is understated.
• D) Expenses are overstated.

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Definitions:

PV Of After-Tax Lease Payments

The present value of after-tax lease payments is the current worth of all lease payments to be made over the lease term, adjusted for taxes.

Original Investment

The initial amount of money or capital put into an investment vehicle or project.

PV Of CCA Tax Shield

The present value of the tax savings a company realizes from being able to deduct the Capital Cost Allowance on its tax return.

PV Of After-Tax Lease Payments

This represents the present value of lease payments made over the lease term, adjusted for tax implications.