An Entity Pays Wages on a Fortnightly Basis and the Next

question 47

Multiple Choice

An entity pays wages on a fortnightly basis and the next payroll date is 8 September.If wages expense is not accrued at 31 August the effect on the financial statements for August will be:

• A) an overstatement of assets and profit.
• B) an understatement of assets and profit.
• C) an understatement of liabilities and an overstatement of profit.
• D) an overstatement of liabilities and an understatement of profit.

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Definitions:

Express Warranty

A statement by a seller about the quality, condition, or performance of a product that forms part of the contractual agreement between the buyer and seller.

Super Store

A large retail establishment offering a wide variety of goods, often at lower prices, under one roof.

Injury

Physical harm or damage to a person's body, often resulting from accidents or violence.

Malfunctioned Toaster

This refers to a toaster device that is not operating correctly due to faults or damages.