Multiple Choice Quiz: A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would, a. Understate net income by $350,000. b. Overstate net income by $350,000. c. Have no effect on net income. d. Overstate assets by $350,000. e. Understate assets by $350,000.

Multiple Choice Quiz: A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would, a. Understate net income by $350,000. b. Overstate net income by $350,000. c. Have no effect on net income. d. Overstate assets by $350,000. e. Understate assets by $350,000.

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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A company forgot to record accrued and unpaid employee wages of $350,000 at period-end. This oversight would a. Understate net income by $350,000. b. Overstate net income by $350,000. c. Have no effect on net income. d. Overstate assets by $350,000. e. Understate assets by $350,000.
Records showed that as of December 31, 2020, accrued salaries payable of P21,000 were not recorded in Company’s books. In addition, office supplies on hand of P9,000 at December 31, 2020 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What is the effect of these two errors? A. 2020 net income and December 31, 2020 accumulated profits are understated by P9,000 each. B. 2019 net income is overstated by P12,000 and 2020 net income is understated by P9,000 C. 2019 net income and December 31, 2019 accumulated profits are understated by P21,000 each. D. 2020 net income is understated by P30,000 and January 1, 2021 accumulated profits is understated by P9,000
If a company produced a net income of P28,000.00 but failed to adjust for P1,500 in depreciation of equipment and P1,400 in accrued wages. Explain how this errors affected the net income. What will be the corrected net income.
A company made no adjusting entry for accrued and unpaid employee salaries of $9,000 on December 31. Which of the following statements is true? a. It will have no effect on income. b. It will understate expenses and overstate net income by $9,000. c. It will overstate assets and liabilities by $9,000. d. It will understate net income by $9,000.
identify whether it is treated as a prior period adjustment or change in accounting estimate. Upon reviewing customer contracts, the company realizes it mistakenly reported $150,000 in revenue instead of the actual amount earned of $15,000. This mistake occurred two years ago and had a material effect on financial statements.
High company, your client, failed to record accrued salaries expense of 50,000 as of December 31, 2022Based on the foregoing, answer the following questions:1.) Which of the following accounts is(are) understated by 50,000 at the end of year 2022 as a result of the error? 2.) Which of the following accounts is(are) overstated by 50,000 at the end of year 2023 as a result of the error? 3.) What would be the adjusting entry if the error is discovered in year 2022? 4.) What would be the adjusting entry if the error is discovered in year 2023? 5.) What would be the adjusting entry if the error is discovered in year 2024?
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
3. A company has an unadjusted debit balance in the Allowance for Doubtful Accounts of $10,000 and the following aging schedule: Name of Customer A B с D Total Percent Uncollectible Total $55,000 112,000 106,000 43,000 $316,000.00 Under 30 days $ 30,000 90,000 65,000 35,000 30-60 days $20,000 10,000 22,000 2,000 $ 220,000.00 $54,000.00 1% 30% What amount should be recorded as the Bad Debt Expense? 60-90 days 5,000 15,000 5,000 $25,000.00 25% Over 90 days $5,000 7,000 4,000 1,000 $17,000.00 35%
Identify the 2 errors in the following Income Statement. Make sure to clearly explain the errors. DIVVY Company Income Statement For the Month Ended 1/31/2021 Revenues Rides Earned 20,000 Cancellation Fee Earned 15,000 Cash 5,000 Total Revenues 40,000 Expenses Wages Expense 10,000 Accumulated Depreciation 25,000 Supplies Expense 15,000 Rent Expense 10,000 Total Expenses 60,000 Net Loss (20,000)
PROBLEM 1 (ERROR CORRECTION) Koshu Co., a calendar year entity, contained the following independent errors at the end of each reporting period: (Amounts in thousands) 2020 50 under 2019 40 under 12 under 68 under 25 under 2018 Accounts Payable Depreciation Expense Merchandise Inventory 20 over 16 under 33 over 45 under 97 over Accrued Income 33 over 56 under Unearned Income 14 under 85 over 27 over 45 under Advances to Suppliers 105 under Advances from Customers Accounts Receivable Accrued Expense Prepaid Expense 82 over 71 under 68 under 85 under 92 over 78 under 27 under 17 over 19 over 18 under 12 under Compute for the following: a. Net adjustments on 2018 and 2020 Profits b. Effects of errors on the 2019 and 2020 Accumulated Profits c. Net adjustments to 2018 and 2019 Working Capital d. Adjusted total 2018 and 2020 Total Assets assuming unadjusted balances of total assets of 2018 and 2020 were P890 and P920, respectively e. Effects of errors on 2018 and 2019 Total Liabilities
Clock Company showed the following errors in their account during December 31, 2021: Dividends of P 100,000 had been declared but was not recorded on December 10, 2021. Buildings and equipment maintenance for P 480,000 had been debited to expense at the end of April 2020. It had an estimated life of 8 years. The company failed to record sales commissions payable amounting to P 10,500 and P 19,000 at the end of 2020 and 2021, respectively. Supplies on hand amounting to P 6,000 and P 15,000 were not recognized at the end of 2020 and 2021, respectively. What is the net effect of the error in the 2021 net income? a.P 59,500 over b.P 72,200 under c.P 75,000 over d.P 70,000 over
Question 13 of 34 Records showed that as of December 31, 2014, accrued salaries payable of P21,000 were not recorded in Latin Company's books. In addition; office supplies on hand of P9,000 at December 31, 2015 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What is the effect of these two errors? Select the correct response: 2015 net income is 'understated by P30,000 and January 1, 2016 accumulated profits is understated by P9,000. 2014 net income and December 31, 2014 accumulated profits are understated by P21,000 each. 2014 net income is overstated by P12,000 and 2015 net income is understated by P9,000. 2015 net income and December 31, 2015 accumulated profits are understated by P9,000 each.