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A company made no adjusting entry for accrued and unpaid employee wages of $28,000 on December 31. This oversight would: A. Understate net income by $28,000. B. Overstate net income by $28,000. C. Have no effect on net income. D. Overstate assets by $28,000. E. Understate assets by $28,000.

Respuesta :

Answer:

B. Overstate net income by $28,000

Explanation:

Provided that

Unpaid employee wages = $28,000

Since no adjusting entry is made

So, it would overstate the net income and the expenses account too for $28,000 as no adjusting entry is passed that reduced the expenses account

Therefore, it will give impact two accounts i.e net income and the expense account. Both the accounts are overstated for $24,000

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