Question :

Which of the subsequent statements is incorrect?

A. Stockholders' equity accounts usually have credit balances.

B. Liability accounts are decreased by credits.

C. Stockholders' equity accounts are increased by credits.

D. Asset accounts are increased by debits.

Which of the given statement is not an accrual?

A. Crediting salaries payable for salaries earned to date.

B. Debiting interest receivable for interest earned to date.

C. Debiting interest expense for interest incurred to date.

D. Debiting depreciation expense for depreciation incurred during the period.

What is the outcome on the financial statements when a company fails to accrue salaries expense at year-end?

A. Total income is overstated and liabilities are understated.

B. Expenses are understated and stockholders' equity is understated.

C. Liabilities and Expenses are both overstated.

D. Total income is overstated and liabilities are not affected.