If a company records a transaction with wrong amounts but properly debits and credits affected accounts, or posts correct numbers to wrong accounts the accounting equation will be satisfied but the financial statements will be incorrect. Othere will be no effect on the financial statements. the financial statements will be correct. the accounting equation will not balance but the financial statements will be correct..

Which one of the following statements is not correct regarding financial accounting and management accounting? O a. Financial accounting reports need to be audited to verify their accuracy unlike management accounting reports which do not need to be audited. O b. Only financial accounting involves the use of accounting information. Management accounting information emphasize supporting decisions that affect the future unlike financial accounting information, which focus on the consequences of past activities of the organization. O c. O d. None of the given answers Financial accounting needs to follow specific set of rules called accounting standards unlike management accounting O e.

The new bookkeeper forgot to record the payment of an accounts payable to a supplier. What impact does this have on the company’s books?     No effect     Cash is understated/the Income Statement is understated     Cash is overstated/the Income Statement is overstated     Cash is overstated/liabilities are understated     Cash is overstated/liabilities are overstated

A trial balance does not balance. The owner believes the following mistakes WOULD cause animbalance. Do you agree? (Answer TRUE or FALSE for each statement) A. The owner forgot to record a cash saleB. A credit sale was recorded as a debit to sales and a debit to trade receivablesC. When transferring the bank overdraft from the Cash T account it was entered on thedebit side of the trial balanceD. Rates expense of £500 was debited to rent expenses and credited to cashE. A payment to a supplier of £690 was entered to cash as £690 but to trade payables as£609