An Entity Pays Wages on a Fortnightly Basis and the Next

Multiple Choice

An entity pays wages on a fortnightly basis and the next payroll date is 8 September.If wages expense is not accrued at 31 August the effect on the financial statements for August will be:

A) an overstatement of assets and profit.
B) an understatement of assets and profit.
C) an understatement of liabilities and an overstatement of profit.
D) an overstatement of liabilities and an understatement of profit.