Question

Problem Page Wright Company's employees earn $370 per day and are paid on Friday for a five-day work week. This year, December 31 is a Thursday. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (b) Net income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)?

Answer 1

Income stament expenses overstated

Net income understated

Balance sheet no effect

Step-by-step explanation:

Monday 74 December

Tuesday 74 December

Wednesday 74 December

Thursday 74 December

Friday 74 January

370

Income stament expenses overstated

Net income understated

Balance sheet no effect