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

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 20EB: Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of...

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