The Bookkeeper Recorded Wages for the Month as a Debit

question 10

Multiple Choice

The bookkeeper recorded wages for the month as a debit to the Sales account rather than as a debit to Wages Expense.This error will result in:

• A)Overstated profit for the period
• B)Understated equity at the end of the period
• C)Understated assets at the end of the period
• D)No effect on profit of the period

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Definitions:

Financial Assets

Instruments that represent a financial value, including stocks, bonds, bank deposits, and mutual funds.

Transfer Payments

Cash or in-kind benefits given to individuals as outright grants from the government.

Double-Entry Bookkeeping

An accounting method that records each transaction in two accounts, ensuring that the total debits equals the total credits and maintaining the balance of the accounting equation.

Aggregate Output

The total quantity of goods and services produced in an economy in a given period.