24.Accrued salaries payable of $51,000 were not recorded at December 31, 2017. O

Question

24.Accrued salaries payable of $51,000 were not recorded at December 31, 2017. Office supplies on hand of $24,000 at December 31, 2018 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. The effect of these two errors would cause a. 2018 net income to be understated $75,000 and December 31, 2018 retained earnings to be understated $24,000. b. 2017 net income and December 31, 2017 retained earnings to be understated $51,000 each. c. 2017 net income to be overstated $27,000 and 2018 net income to be understated $24.000. d. 2018 net income and December 31, 2018 retained earnings to be understated $24,000 each.

Explanation / Answer

Accured salary payable of 51000 not recorded means net income and retained earnings is overstated by $51000

Office supplies 24000 treated as net income and retained earning is under stated by $24000

so answer is d) 2018 net income and december 31,2018 retained earnings to be understated by $24000 each

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