Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 4 - No. 9)
If a company does not record accrued salaries at the end of the year, which of the following would be true?
Assets and liabilities would be overstated.
Liabilities and equity would be understated.
Assets and equity would be overstated.
Liabilities and equity would be overstated.
Explanation
Not recording accrued salaries would mean liabilities (salaries payable) and expenses (salaries expense) are both understated, which leads to an overstatement of equity.
Comments (0)
