For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows: March 31,2010 - ` 56,000 March 31, 2011 - ` 51,000 March 31, 2012 - ` 64,000 The entry on March 31, 2012 to rectify these omissions would include a
Correct answer: D. Debit to wage expense for ` 13,000
- A. Credit to wage expense for ` 64,000
- B. Debit to wage expense for ` 64,000
- C. Debit to wage expense for ` 51,000
- D. Debit to wage expense for ` 13,000
Explanation
The current year’s omitted accrual is 64,000, but the prior year’s omitted accrual of 51,000 must be adjusted through the previous-period balance, leaving 13,000 to be debited to current wage expense. This is why the correction is not a debit for the full 64,000.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
Practise Accounting Principles
351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Accounting Principles questions
Purchase journal is kept to record_____________?
The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
Which of the following errors affects the agreement of a Trial Balance?
If goods worth 1,750 returned to a supplier is wrongly entered in sales return book as 1,570, then
Which of the following is not correct about Errors?
Which of the following statements is correct about Trial Balance?