COMPLETE
SOLUTIONS MANUAL
Fundamental Accounting Principles
17th Canadian Edition
by Larson/Dieckmann/Harris
AI-1
, Appendix I Payroll Liabilities
Appendix Critical Thinking Challenge Questions*
If payroll liabilities are not recorded, what is the effect on the financial statements?
- If payroll liabilities are not recorded, expenses on the income statement will be
understated causing profit to be overstated. On the balance sheet, unrecorded payroll
liabilities will cause liabilities to be understated and equity to be overstated.
AI-2
SOLUTIONS MANUAL
Fundamental Accounting Principles
17th Canadian Edition
by Larson/Dieckmann/Harris
AI-1
, Appendix I Payroll Liabilities
Appendix Critical Thinking Challenge Questions*
If payroll liabilities are not recorded, what is the effect on the financial statements?
- If payroll liabilities are not recorded, expenses on the income statement will be
understated causing profit to be overstated. On the balance sheet, unrecorded payroll
liabilities will cause liabilities to be understated and equity to be overstated.
AI-2
