32 Chapter F3 6. At the end of the preceding fiscal year, the usual adjusting entry for accrued salaries owed to employees was omitted. The error was not corrected, but the accrued salaries were included in the first salary payment in the current fiscal year. Which of the following statements is true? a. Salary Expense was overstated and net income was understated for the current year. b. Salaries Payable is understated at the end of the current fiscal year. c. Salary Expense was overstated and net income was understated for the preceding year. d. Salary Expense and Salaries Payable were overstated for the preced- ing year. 7. The decrease in usefulness of fixed assets as time passes is called: b. deterioration c. depreciation d. contra asset 8. The difference between the fixed asset account and the related accumu- lated depreciation account is called the: a. book value of the asset b. fair market value of the asset c. net cost of the asset d. contra account balance of the asset 9. If a $250 adjustment for depreciation is not recorded, which of the following financial statement errors will occur? a. expenses will be overstated b. net income will be understated c. assets will be understated d. retained earnings will be overstated 10. The net income reported on the income statement is $50,000. However, adjusting entries have not been made at the end of the period for supplies expense of $500 and accrued salaries of $1,300. Net income, as corrected a. $48,200 b. $48,700 c. $50,500 d. $51,800