Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

The trial balance of Ralf Traders for the current financial period ending 28 February 2019, reflected salaries and wages to the amount of R119 000.

image text in transcribed

The trial balance of Ralf Traders for the current financial period ending 28 February 2019, reflected salaries and wages to the amount of R119 000. The bookkeeper of Ralf Traders compared the salaries and wages of the previous financial year with the salaries and wages of the current financial year and noted that the salaries and wages for the current financial year have increased by R9 000. According to the bookkeeper's knowledge, there were no new appointment, no resignations, no salaries and wages increases, no leave days pay-outs and no bonuses were paid during the current financial period. Therefore, salaries and wages for current financial period should be the same as the salaries and wages of the previous financial period. After a thorough investigation by the human resources manager, it was noted on the 28 February 2019 payroll, that one employee was paid R10 000 instead of a monthly salary of R1 000 for the month of February 2019. Instead of requesting the employee to pay back the extra amount, the human resource manager and employee agreed that the extra salary is the payment for the next nine months. No adjustment journal entry has been processed by the bookkeeper in the accounting books of Ralf Traders. The effect that the adjustment journal entry will have on the basic accounting equation of Ralf Traders for the year ended 28 February 20.19 will be? A. Assets and equity will increase by R1 000 and liabilities will not be affected. B. Assets will increase by R9 000; equity will increase by R9 000 and liabilities will not be affected. C. Assets will not be affected; equity will decrease by R10 000 and liabilities will increase by R10 000. D. Assets will not be affected; equity will decrease by R9 000 and liabilities will increase by R9 000. . . E. Assets will decrease by R10 000; equity will decrease by R10 000 and liabilities will not be affected

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray Garrison, Eric Noreen, Peter Brewer

16th edition

978-1259307416

Students also viewed these Accounting questions