Effect of omitting adjusting entry Accrued salaries owed to employees for August 30 and 31 are not considered in preparing the financial statements for the year ended August 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of August 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Owner's Equity

Effect of omitting adjusting entry Accrued salaries owed to employees for August 30 and 31 are not considered in preparing the financial statements for the year ended August 31. Indicate which items will be erroneously stated, because of the error, on (a) the income statement for the year and (b) the balance sheet as of August 31. Also indicate whether the items in error will be overstated or understated. a. Income Statement Salaries Expense Net Income b. Balance Sheet Salaries Payable Owner's Equity

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter3: Basic Accounting Systems: Accrual Basis

Section: Chapter Questions

Problem 3.16E: Effect of omitting adjustment Assume that the error in Exercise 3-15 was not corrected and that the...

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Effect of omitting adjustment Assume that the error in Exercise 3-15 was not corrected and that the $6750 of accrued salaries was included in the first salary payment in January 20Y7. Indicate which items will he erroneously stated LWC1LL%C of failure to correct the initial error on (a) the income statement for January 20Y7 and (h) the balance sheet as of January 31, 20Y7.
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if mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770). What is the effect of each error, considered individually, on the income statement for the current year ended July 31.
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Effects of errors on financial statementsThe accountant for Healthy Life Company, a medical services consultingfirm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($34,900) and (b) accrued wages ($12,770).Indicate the effect of each error, considered individually, on the incomestatement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Set up a table similar to thefollowing, and record your answers by inserting the dollar amount in theappropriate spaces. Insert a zero if the error does not affect the item.
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