Adjustment accounts are needed every year because of errors made during the year False True
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A: Trial balance:
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Q: How to adjust this: Doubtful Accounts for the year 4,000
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A:
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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.At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $752. During the year, previously written off accounts of $141 are reinstated and accounts totaling $710 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be a.$183 b.$710 c.$141 d.$752How to adjust this: Doubtful Accounts for the year 4,000
- Which of the following types of errors will not self-correct in the next year? Accrued expenses not recognized at year-end Accrued revenues that have not been collected not recognized at year-end Depreciation expense overstated for the year Prepaid expenses not recognized at vear-endWhich of the follwing in correct? a. Balance sheet accounts are considered temporary accounts and these accounts have balances that are carried forward from year to year. b. Balance sheet accounts are considered permanent accounts and these accounts have balances that are carried forward from year to year. c. Balance sheet accounts are considered permanent accounts and these accounts have balances that are closed each year. d. Profit and Loss accounts are considered permanent accounts and these accounts have balances that are closed each year.If at the end of the year Allowance for Uncollectible Accounts has a credit balance before any adjustment, what might that tell us about last year’s ending balance of the account?
- The correction of a material error discovered in a year subsequent to the year the error was made is considered a prior period adjustment. Briefly describe the accounting treatment for prior period adjustments.At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $774. During the year, $346 of previously written off accounts were reinstated and accounts totaling $845 are written off as uncollectible. The end of the year balance in the Allowance for Doubtful Accounts should be the one listed below. Select the correct answer. $275 $346 $774 $845Prepare the year-end adjusting entry for bad debts according to each of the following situations: Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is estimated to be 10% of the year-end balance in accounts receivable. Bad debt expense is estimated by adjusting the allowance for uncollectible accounts to the balance that reduces the carrying value of accounts receivable to the amount of cash expected to be collected. The allowance for uncollectible accounts is determined by an aging of accounts receivable.
- At the beginning of the year, the balance in the Allowance for Doubtful Accounts is a credit of $559. During the year, $349 of previously written off accounts were reinstated and accounts totaling $837 are written off as uncollectible. The end-of-year balance (before adjustment) in the Allowance for Doubtful Accounts should be the one listed below. a.$349 b.$71 c.$559 d.$837At the beginning of the year, the balance in Allowance for Doubtful Accounts is a credit of $780. During the year, previously written off accounts of $119 are reinstated and accounts totaling $744 are written off as uncollectible. The end-of-year balance (before adjustment) in Allowance for Doubtful Accounts should be Oa. $780 © b. $744 O c. $119 Od. $155A company has just discovered a material error in the financial statements. The error goes back six years, affecting both the income statement and the balance sheet each year. How should the company correct this error? Should all financial statements be revised, or should the company stick with its normal reporting of two years for the balance sheet and three years for the income statement and statement of stockholders’ equity? Can you explain how a prior period adjustment works, if applicable?