Please answer 1, 2.

1. Accrued salaries payable of $51,000 were not recorded at December 31, 2014. This error got counter-balanced when cash salaries of $51,000 were paid in 2015. The error was never discovered or corrected. The effect of the error would cause

a) 2014 net income and December 31, 2014 retained earnings to be understated $51,000 each.

b)2014 net income to be overstated $51,000 and December 31, 2015 retained earnings to be understated $51,000.

c)December 31, 2014 retained earnings to be overstated $51,000 and December 31, 2015 retained earnings to be correct.

d) 2014 net income to be understated $51,000 and 2015 net income to be overstated $51,000.

2.

From the lessees perspective, in the earlier years of a lease,

a) operating leases will enable the lessee to report higher income, compared to finance leases.

b) finance leases will enable the lessee to report higher income, compared to operating leases.

c) operating leases will cause lease liability to increase, compared to finance leases.

d) the lessee will report the same amount of income for operating leases and finance leases.