Accrued salaries of $600 owed to employees for December 29, 30, and 31 are not taken into consideration in preparing the financial statements for the year ended December 31 . Indicate which items will be erroneously stated, because of the error, on (a)
the income statement for the year and (b) the balance sheet as of December 31 . Also indicate whether the items in error will be overstated or understated.
(a) Salary expense (or expenses) will be understated. Net income will be overstated.
(b) Salaries payable (or liabilities) will be understated. Shareholders' equity will be overstated.
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Answer the following statement true (T) or false (F)
Although important, security auditing is not a key element in computer security
Indicate whether the statement is true or false.
In cases of operations located in highly inflationary economies:
A. The foreign currency should be used as the functional currency with a single line item-foreign translation-reporting the adjustment using the U.S. dollar as the functional currency. B. The foreign currency should be used as the functional currency with a footnote to the financials displaying what the earnings would have been using the U.S. dollar as the functional currency. C. The reporting currency of the U.S. parent-the U.S. dollar-should be used as the foreign entity's functional currency. D. None of the choices are correct.
How does the amortization of the principal balance on an installment note payable affect the amount of interest expense recorded each succeeding year?
A. Increase the amount of interest expense each year B. Has no effect on interest expense each year C. Reduces the amount of interest expense each year D. Cannot be determined from the information provided