Analyzing and Computing Accrued Wages Liability and Expense

Analyzing and Computing Accrued Wages Liability and Expense Demski Company pays its employees on the 1st and 15th of each month.

Analyzing and Computing Accrued Wages Liability and Expense

Demski Company pays its employees on the 1st and 15th of each month. It is March 31 and Demski is preparing financial statements for this quarter. Its employees have earned $23,000 since the 15th of March and have not yet been paid.

How will Demski’s balance sheet and income statement reflect the accrual of wages on March 31?

Answer Increase

wages payable by $Answer 23000

on the balance sheet.

Answer Increase

wages expense by $Answer 23000

on the income sheet.

Indicate the effect on the balance sheet and income statement accounts if Demski failed to make this accural (overstated or understated).

Liabilities Answer Understated

 

Wages Expense Answer Understated
Income Answer  Overstated

 

Stockholders’ Equity Answer  Overstated

 

Sharing is caring!

Have any Question or Comment?

Leave a Reply

Your email address will not be published. Required fields are marked *

error: Content is protected !!