Question

Which of the following statements about adjustments is correct? Multiple Choice Accrued wages are wages owed, but not yet paid, to employees; the accrued wages will need to be recorded with an adjusting entry that increases expenses. When making an adjustment to recognize supplies used in a period, total assets will not change. Deferral adjustments are used to update amounts that have been previously deferred on the income statement. Depreciation is an example of an accrual adjustment.

Answer 1

Answer:

The Statement that is correct about adjustments is:

Accrued wages are wages owed, but not yet paid, to employees; the accrued wages will need to be recorded with an adjusting entry that increases expenses.

Explanation:

Unpaid wages are adjusted with a debit to the Wages Expense account, which increases the account, and a credit to the Wages Payable account, which also increases the account by the same amount.  The purpose of this accrual adjustment is to ensure that the amount reported as Wages Expense is the actual expense incurred for Wages, whether actually paid or not, and thus report the accurate net income and liabilities for the period.