Answer:
correct option is B. understatement; $30,900
Explanation:
given data
normal weekly wage = $12,500
work = 5 day week
performed services = $40,900
solution
as here net income under cash basis will be nil
because here cash not receive till the July 8,
and here cash is paid to employee on July 1 which is Friday
so net income under an accrual basis for June month
and here revenue not yet received is $40,900
and salaries payable for last four days of June month will be as
salaries payable =
salaries payable = $10000
so Net income as per accrual basis will be
Net income = $40,900 - $10000
Net income = $30,900
so here income under cash basis is understated
so correct option is B. understatement; $30,900