Answered: Which of the following is not a…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 4MC: A change in the expected service life of an asset arising because additional information has been...

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Which of the following is not a characteristic of non-counterbalancing error?

a. If not detected, this is not automatically corrected in the next accounting period.

b. The income statement of the period in which the non-counterbalancing error is committed is misstated.

c. The statement of financial position of the year of non-counterbalancing error and succeeding statement of financial position are incorrect until the error is corrected.

d. If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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