At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending working capital and on the Year 2 ending retained earnings balance? Year 1 Ending Working Capital Year 2 Ending Retained Earnings A Overstated Overstated B No effect Overstated C No effect No effect D Overstated No effect

At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending working capital and on the Year 2 ending retained earnings balance? Year 1 Ending Working Capital Year 2 Ending Retained Earnings A Overstated Overstated B No effect Overstated C No effect No effect D Overstated No effect

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter3: The General Journal And The General Ledger

Section: Chapter Questions

Problem 7E: Determine the effect of the following errors on a companys total revenue, total expenses, and net...

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WHICH STATEMENT IS FALSE?A. If the net income of prior period is overstated because of the change in accounting policy, the effect is deducted from the beginning retained earnings.B. Equity is also the net assets.C. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of the prior period is overstated, the amount of the error uis deducted from retained earnings.D. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
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Which of the statements below is false? If the net income of prior period is overstated because of the change in accounting policy, the effect is (A) deducted from the beginning retained earnings. Prior period errors are shown as adjustment of the ending balance of retained earnings. If the net income of (B) the prior period is overstated, the amount of the error uis deducted from retained earnings. Equity is also the net assets. In the conversion of preference chares into ordinary shares, if the total par or stated value of the ordinary D shares is more than the original issue of the preference shares, the difference is charged to retained earnings.
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If a company captúrales a cost that should have been expensed.... A. Expenses will be overstated and net income will be understated in the years of the error B. Expenses will be understated and net income will be overstated in the year of the error C. Expenses and net income will be understated in the year of the error D. Expenses and net income will be overstated in the year of the error
f. What is the effect of these errors on Net Income, Earnings per Share, Total Liabilities and Retained Earnings if they are not discovered (detected) before the publication of the annual report? t
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