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 mand 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.

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 mand 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.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 14PA: Assuming a companys year-end inventory were overstated by $5,000, indicate the effect...

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