The accountant for We Deliver, Inc. forgot to make an adjusting entry at the end of the year to record the salaries owed to employees for working the last week of the year. What effect did this omission have on the company's financial statements? Group of answer choices A. Overstated assets and retained earnings. B. Understated assets and retained earnings. C. Overstated liabilities and understated retained earnings. D. Understated liabilities and overstated retained earnings.

The accountant for We Deliver, Inc. forgot to make an adjusting entry at the end of the year to record the salaries owed to employees for working the last week of the year. What effect did this omission have on the company's financial statements? Group of answer choices A. Overstated assets and retained earnings. B. Understated assets and retained earnings. C. Overstated liabilities and understated retained earnings. D. Understated liabilities and overstated retained earnings.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 10P: At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2...

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At the beginning of 2020, Tanham Company discovered the following errors made in the preceding 2 years: Reported net income was 27,000 in 2018 and 35,000 in 2019. The allowance for doubtful accounts had a zero balance at the beginning of 2018. No accounts were written off during 2018 or 2019. Ignore income taxes. Required: 1. What is the correct net income for 2018 and 2019? 2. Prepare the adjusting journal entry in 2020 to correct the errors.
The accountant forgot to record the accrual of salary and wages expense for the last few days of the month. What is the effect on the financial statements due to this omission? Address both financial statements and which account(s) may be misstated.
Effect of omitting adjusting entryAccrued salaries owed to employees for October 30 and 31 are not considered in preparing the financial statements for the year ended October 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of October 31. Also indicate whether the items in error will be overstated or understated.
On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets? Mutiple Choice Decrease in net income; no effect on total assets. No effect on net income; no effect on total assets. Decrease in net income; decrease in total assets. Increase in net income; no effect on total assets. No effect on net income; decrease in total assets
c. Assuming you have checked this account and have detected that client did not record an expense transaction of $60,000 for the accrued salary incurred in June 2020. The client also did not calculate and record the accrued annual leave expenses for the 2020 financial year at the amount of $30,000 - What management assertions are violated (i.e. at risk) - What would you do in relation to the personnel expenses account if you have determined that the issues detected all are errors (an unintentional mistake).
When adjusting entries were made at the end of the year, the accountant for Parker Company did not make the following adjustments. Required: Identify the effect on the financial statements of the adjusting entries that were omitted. a. Wages of $2,900 had been earned by employees but were unpaid.This error will understate expenses and understate liabilities. b. $3,750 of performance obligations had been satisfied but no cash was uncollected nor any revenue recorded. c. $2,400 performance obligations had been satisfied. The customer had prepaid for this service and the amount was originally recorded in the Unearned Sales Revenue account.This error will understate revenues and overstate liabilities. d. $1,200 of insurance coverage had expired. Insurance had been initially recorded in the Prepaid Insurance account.
Effect of Omitting Adjusting Entry Accrued salaries owed to employees for October 30 and 31 are not considered in preparing the financial statements for the year ended October 31. Indicate which items will be erroneously stated, because of the error, on (A) the income statement for the year and (B) the balance sheet as of October 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Stockholders' Equity
The accountant of Reliable Consulting, Inc. failed to make an adjusting entry to record $6,000 for unearned service revenues that were earned before the end of the fiscal year. Assume the company initially recorded a liability. Which of the following statements is true? A. The total liabilities will be overstated. B. The total liabilities will be understated. C. The total assets will be overstated. D. The total assets will be understated.
Effect of omitting adjusting entry Accrued salaries owed to employees for August 30 and 31 are not considered in preparing the financial statements for the year ended August 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of August 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Owner's Equity
your client, failed to record accrued salaries expense of P 50,000 as of December 31, 2022. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) understated by P 50,000 at the end of year 2022 as a result of the error? Question 2: Which of the following accounts is(are) overstated by P 50,000 at the end of year 2023 as a result of the error? Question 3: What would be the adjusting entry if the error is discovered in year 2022? Question 4: What would be the adjusting entry if the error is discovered in year 2023? Question 5: What would be the adjusting entry if the error is discovered in year 2024?
Duke Company hired a new accountant late in December 2020 who made several errors when closing the books. Accrued salaries payable of $102,000 were not recorded at December 31, 2020. Office supplies on hand of $58,000 at December 31, 2021 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected before the financial statements were issued. The effect of these two errors would cause Question 3Select one: 2020 net income and December 31, 2020 retained earnings to be understated $102,000 each. 2020 net income to be overstated $44,000 and 2021 net income to be understated $58,000. 2021 net income to be understated $160,000 and December 31, 2021 retained earnings to be understated $58,000. 2021 net income and December 31, 2021 retained earnings to be understated $58,000 each.
if mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). What is the effect of each error, considered individually, on the income statement for the current year ended July 31.