A Company Made No Adjusting Entry for Accrued and Unpaid

question 227

Multiple Choice

A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is ?

• A) It will have no effect on income.
• B) It will overstate assets and liabilities by $9,000.
• C) It will understate net income by $9,000.
• D) It will understate assets by $9,000.
• E) It will understate expenses and overstate net income by $9,000.

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