If a journal entry and posting for salaries expense that incurred during this year but will be paid until next year is accidentally omitted, what would be the impact on the financial statements?
a) net income would be overstated (expenses understated) and balance sheet liabilities would be understated.
b) net income would be overstated (expenses understated) and balance sheet assets would be overstated.
c) net income would be understated (expenses overstated) and balance sheet assets would be understated.
d) net income would be understated (expenses overstated) and balance sheet liabilities would be understated.

The correct answer is A) Net Income would be overstated (Expenses understated) and Balance Sheet liabilities would be understated.

Explanation: An omission of a posting of an expense incurred during a financial year and payable in thesubsequent year will lead to an understatement of expenses and understatement of liabilities.

In general, when an expense is omitted it leads to increased net income as less expense will be knocked off against income.

The balance sheet on the other hand will be understated in terms of a reduced liability balance.

Pay tuition first

Explanation:

Mrs. Das should pay the tuition fee of her children first from the $5000 balance with her, this is to enable the children take their exams without any distraction. Failure to pay their tuition may also mean that the children will spend an additional year in some cases. Therefore to avoid inflicting psychological distress on the children, paying the children's tuition will be made priority.

Also, settling Avon before the due date is important too and if I were in her shoes may decide to return or sell some of the goods purchased from her because it could be seen that Mrs. Das was carried away by Avon's stock and purchased more than those things which they needed most importantly.