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On December 31, 2020, Mickelson, Inc. fails to properly accrue incurred but unpaid year-end wages....

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Accounting

On December 31, 2020, Mickelson, Inc. fails to properly accrue incurred but unpaid year-end wages. The wages are subsequently paid and charged to wages expense in January 2021.

What would be the effect of the omission on accrued liabilities (AL) and retained earnings (RE) in the December 31, 2020 balance sheet?

Group of answer choices

AL understated and RE overstated

No effect on either AL or RE

No effect of AL and RE overstated

AL understated and no effect on RE

Answer & Explanation Solved by verified expert
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