Monday, March 12, 2012

Double Accrued Liability Journal Entry

What would happen if a journal entry that records an accrued liability was accidentally recorded twice on the ledger?

Accounting Question Answer:

Income would be understated for the current accounting period. The error by the accountant makes an expense to be overstated because there is extra debt. At the same time,  the related payable is also overstated on the account because of the extra debit.

In conclusion, when there are double journal entries for an accrued liability, income is understated and liabilities would be overstated on the balance sheet.

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