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.

If Mickelson does not discover the error until December 31, 2021, after the 2021 books have been closed, what correcting entry is necessary on December 31, 2021?

Group of answer choices

No correcting error is necessary.

Debit wages expense and Credit retained earnings

Debit retained earnings and Credit accrued liabilities

Debit retained earnings and Credit wages expense