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?
wages payable by $Answer 23000
on the balance sheet.
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).
|Wages Expense||Answer Understated|
|Stockholders’ Equity||Answer Overstated