Due to an Oversight,a Company Made No Adjusting Entry for Accrued

question 15

Multiple Choice

Due to an oversight,a company made no adjusting entry for accrued and unpaid employee wages of $24,000 on December 31.This oversight would:

• A)Understate net income by $24,000
• B)Overstate net income by $24,000
• C)Have no effect on net income
• D)Overstate assets by $24,000
• E)Understate assets by $24,000

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Definitions:

Futures Contract

Financial derivatives that obligate the buyer to purchase, and the seller to sell, a specified asset at a predetermined future date and price.

Futures Contracts

Agreements to buy or sell an asset at a future date at a price agreed upon today.

Actual Delivery

In finance, refers to the physical delivery of a financial instrument or commodity as opposed to a settlement made in cash or another financial arrangement.

Long Corn Futures

An investment position that speculates on the future price increase of corn by purchasing corn futures contracts.