hard · Financial Accounting accounting-cycle-financial-statements
An accountant forgot to record the closing entry for Wage Expense of $4,500.
What is the immediate impact of this error on the financial statements at the start of the next period?
- Retained Earnings will be overstated and the Wage Expense account will have an incorrect beginning balance
- Total Assets reported on the company's Balance Sheet will end up understated by $4,500 this period
- Net Income reported for the following full accounting period will be correctly and accurately stated
- The fundamental accounting equation itself will be thrown fully and completely out of balance by exactly $4,500
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