The purchase of fixed assets totalling $ 100 on account was incorrectly recorded as a debit to expense and a credit to cash. As a result of this error, which of the following statements is true?
Q: Compared to the accrual basis of accounting, the cash basis understates income by the net decrease…
A: when net income has to be computed as per cash basis, the revenues and expenses actualle received or…
Q: Consider the following transactions associated with accounts receivable and the allowance for…
A:
Q: Which of the following statements is incorrect? A. The accrual method, which builds directly on the…
A: Following are the correct statement: 1. The accrual method, which builds directly on the revenue and…
Q: Adjusting entries are needed to correctly measure the ________. A. net income (loss) on the…
A: Adjusting journal entry: At year-end when the company finalizes its accounts then any unrecognized…
Q: Hly Rired you because they're aware that you're familiar with financial statements and what should…
A: Working notes: Correct Balance sheet Assets Liabilities…
Q: hand. (a) Assuming no errors occurred during journalizing or posting, what caused this unusual…
A:
Q: Identify whether a debit or credit results in the indicated change for each of the following…
A: Unearned Revenue: Unearned Revenue refers to the revenue earned by the company but the goods or…
Q: A debit balance in which of the following accounts would indicate a likely error? a.Notes Payable…
A: Normally all assets and expense accounts in the business have debit balances. All liabilities,…
Q: When, at the end of an accounting period, a revenue has been recognized in the fi nancial statements…
A: There are certain services that would be delivered & the same would be received by the customer.…
Q: The purchase of fixed assets totalling $ 100 on account was incorrectly recorded as a debit to…
A: Purchase of fixed assets on account should be recorded as debit to assets account and credit to…
Q: Prepaid expenses Required: Each of the following statements may (or may not) describe one of these…
A: Match the terms with the given Statements. Required Each of the following statements may (or may…
Q: Which statement is incorrect? Under cash basis of accounting,
A: Cash basis of accounting: It is a method of accounting adopted by companies where the transactions…
Q: Where should the following items be shown on the balance sheet, if shown at all?(a) Allowance for…
A: Balance sheet: This financial statement reports a company’s resources (assets) and claims of…
Q: Which of the following accounting procedures are INCORRECT? I) Asset An increases, Debit & A…
A: Accounting procedures states the recording and reporting of the financial statements so that they…
Q: The collection of an account that had been previously written off under the allowance method of…
A: Introduction Bad debts recovery under allowance method: Under this method, bad debts are estimated…
Q: When, at the end of an accounting period, a revenue has been recognized in the fi nancial statements…
A: Income accrued (also referred to as accrued assets) is income received by the client but not yet…
Q: Which of the following accounts is not a permanent account? Select one: a. Utilities Expense b.…
A: A permanent account is the account which is not closed at year end and same is carried to balance…
Q: Which situation indicates a net loss within the Income Statement section of the worksheet? Total…
A: Income statement:Income statement is the financial statement which reports revenues and expenses…
Q: The entry to write off an account receivable under the allowance method willT ( A. increase total…
A: Introduction: Journals: Recording of a business transactions in a chronological order. First step in…
Q: a) Recording the usage of supplies involves an increase in liabilities and a decrease i e b) The…
A: The answer is stated below: Note: Answering the first three subparts as there are…
Q: What is the impact on the accounting equation when an accounts receivable is collected?A. both sides…
A: Accounting equation is one of the important concept used in accounting. Three elements of accounting…
Q: Assume that Muscular Consulting erroneously recorded the payment of $7,500 of dividends as a debit…
A: Some of the errors not affecting Trial balance are as follows:- 1. Error of Ommission 2. Error of…
Q: What is the net impact to total assets when an account receivable is written ofif? decrease in total…
A: JOurnal entry for written off of Accounts receivable: DATE ACCOUNTS DEBIT CREDIT Allowance…
Q: Which statement is correct regarding IFRS? a. IFRS reverses the rules of debits and credits, that…
A: IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring…
Q: Under accrual accounting: Group of answer choices a)Revenue cannot be recognized until cash is…
A: As per the cash basis of accounting, we should record the transaction only when corresponding cash…
Q: An accounting trasaction simultaneously decreases assets and equity.This transaction is explained by…
A: Lets understand the basics. All the accounting transaction are having dual impact. In other words…
Q: Indicate the net effect (+ for increase; - for decrease; 0 for no effect) of each part of the…
A: The accounting equation states that assets equal to sum of liabilities and equity. The transactions…
Q: I. Write "T" if the statement is True and write "F" if otherwise 1. Depreciation charges throughout…
A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get…
Q: A credit to a liability account indicates an increase in the amount owed to creditors. must be…
A: Creditors are the liabilities to the organizations. They have credit Balances. That is why if there…
Q: Which of the following statements is correct about an adjusting entry?
A: Meaning of Adjusting entries;- According to accountancy adjusting entries are those journal entries…
Q: Failure to record the typical balance day adjustment to the Unearned Revenue account would: Select…
A: Unearned Revenue: If you get money for a service or product that has not yet been offered or…
Q: Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are…
A: As posted multiple sub parts we are answering only first three sub parts kindly repost the…
Q: 1. Which statement is correct regarding IFRS?(a) IFRS reverses the rules of debits and credits, that…
A: IFRS: International Financial Reporting Standard is abbreviated as IFRS. The IFRS is set up to bring…
Q: Which of the following transactions would cause the current ratio to increase (assumingthe current…
A: The current ratio is frequently used to assess a company's capacity to meet current obligations. A…
Q: 2) Accounts receivable erroneously debited to note receivable Effect on retained earnings -Since…
A: We know that both the accounts receivable and notes receivable are current assets. Retained earnings…
Q: Which of the following errors would cause the BalanceSheet and Statement of Owner’s Equity columns…
A: Financial statements: These refer to the formal or official records of the activities of the…
Q: Which of the following statements is correct? Options: • Prepayments of supplies initially…
A: Solution: "If unpaid expenses incurred during the accounting period are not accrued, the income for…
Q: roneously debited to Building of an account receivable by nonth was omitted. quisition of office…
A: Given table as,
Q: The payment of supplier's account is debited to accounts receivable. What is the effect of the error…
A: Ans. The error while passing journal entries leads to overstated or understate of profits.
Q: COVID Company recognizes revenue in the period in which the account receivable is collected in cash,…
A: As per the cash basis of accounting, we should record the transaction only when corresponding cash…
Q: The payment of supplier’s account is debited to accounts receivable. What is the effect of the error…
A: The Account Receivables are assets for the firm and Account Payables are liability for the firm. The…
Q: Which of the Tollowing is an asset exchange transaction? O a. Issued common stock. b. Accrued salary…
A: When just asset accounts are involved in a transaction, it is called an asset exchange transaction.
Q: For each of the following errors, considered individually, indicate whether the error would cause…
A: Requirement a: For accrued fees earned, the accounts receivable is debited for $5,340 and the fees…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
- What is the impact on the accounting equation when an accounts receivable is collected? A. both sides increase B. both sides decrease C. only the Asset side changes D. the total of neither side changesChoose the incorrect statement below:A. Recognition for depreciation under the cash basis of accounting is different from that of the accrual basis of accounting.B. Deferred income is income already received but not yet earned.C. At the end of the accounting period, adjustments are made for accruals and prepayments in order to convert the cash records to accrual records.D. To compute for the sales on account, the beginning balance of trade accounts and notes receivable is deducted from the total of trade accounts and notes receivable, ending balance, collection of trade accounts and notes receivable, sales returns, discounts, and allowances and accounts written off.For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.(a) The adjustment for accrued fees of $5,340 was journalized as a debit to Accounts Payable for $5,340 and a credit to Fees Earned of $5,340.(b) The adjustment for depreciation of $3,260 was journalized as a debit to Depreciation Expense for $3,620 and a credit to Accumulated Depreciation for $3,260.
- For each of the following errors, considered individually, indicate whether the error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.a. The adjustment of $9,800 for accrued fees earned was journalized as a debit to Accounts Receivable for $9,800 and a credit to Fees Earned for $8,900.b. The adjustment of depreciation of $3,600 was omitted from the end-of-period adjusting entries.The payment of supplier’s account is debited to accounts receivable. What is the effect of the error in the net income of the current period and in subsequent period? a. Understated b. Cannot be determined based on the given information c. No effect d. OverstatedIf a company fails to make an adjusting entry to estimate uncollectible accounts, then this error: A understates assets B understates owners equity C overstates experise D overstates net income
- Which statement about the worksheet is not correct? A. Resulting net income or net loss is reflected in the worksheet B. The difference betwwen the total debits and total credits in the income statement column has to be the same as the difference between the total debits and total credits in the balance sheet columns C. The adjusting entries are entered in the worksheet D. The total debits and total credits in the income and income statements columns are not the same before and after the recognition of the net income or net lossThe payment of supplier’s account is debited to accounts receivable. What is the effect of the error in assets and liabilities of the entity? Group of answer choices a. Assets - understated; Liabilities - understated b. Assets - understated; Liabilities - overstated c. Assets - overstated; Liabilities - overstated d. Assets - overstated; Liabilities - understatedThe payment of supplier’s account is debited to accounts receivable. What is the effect of the error in assets and liabilities of the entity? Assets - overstated; Liabilities - overstated Assets - understated; Liabilities - overstated Assets - understated; Liabilities - understated Assets - overstated; Liabilities - understated
- Which of the errors listed below would cause the unadjusted trial balance to be out of balance? Failure to record an adjusting entry Overstating a liability balance by P100 and expense balance by the same amount. Posting only the debit portion of a journal entry. Interest on a 60-6% note payable for P6,000 was recorded and posted as a debit to Interest Expense of P600 and a credit to Cash of P600,Which of the following errors does NOT prove the equality of the trial balance debit and credits? a) A Miscellaneous expense for the transportation was omitted. b) A debit entry of P11,000 for rent was posted as P10,100 c) A payment for utilities was recorded twice. d) A debit to Supplies was recorded as debit to Equipment.Which of the following statements is correct? Options: • Prepayments of supplies initially recorded as asset will be adjusted at the end of the period as debit to unused supplies the portion that remains unused • Prepayments of interest expense under asset method should be recorded as debit to unearned interest • If unpaid expenses incurred during the accounting period are not accrued, the income for the period will be overstated • There is no provision for depreciation in cash basis accounting because there is no actual cash involved