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
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