Failure to Make the Appropriate Adjustment to the Salary Expense

question 44

Multiple Choice

Failure to make the appropriate adjustment to the Salary Expense account will result in:

• A) Understating profit for December by $6,800.
• B) Understating profit for January by $6,800.
• C) Overstating total liabilities at December 31.
• D) Overstating the balance in Cash at December 31.

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Definitions:

Computer Manufacture

The process involving the assembly and production of computer hardware and components, often involving complex electronic and mechanical processes.

Overhead Applied

The portion of overhead costs allocated to specific jobs or production activities based on a predetermined rate.

Predetermined Rate

An estimated cost rate established before the start of a period and used to apply costs uniformly throughout the period.

Actual Cost

The realized expenses incurred in the production or acquisition of goods and services, as opposed to estimated or standard costs.