Why is it expected that the initial debit and credit totals of the income statement accounts do not balance on a 10-column worksheet? Select one: a. None of the choices available. b. This is expected because the company should report an asset. c. This is not expected and it shows that there is definitely an error made. d. This is expected because the company should report an income or a loss.

Why is it expected that the initial debit and credit totals of the income statement accounts do not balance on a 10-column worksheet? Select one: a. None of the choices available. b. This is expected because the company should report an asset. c. This is not expected and it shows that there is definitely an error made. d. This is expected because the company should report an income or a loss.

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter3: The General Journal And The General Ledger

Section: Chapter Questions

Problem 7E: Determine the effect of the following errors on a companys total revenue, total expenses, and net...

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Determine the effect of the following errors on a companys total revenue, total expenses, and net income. Indicate the effect by writing O for Overstated (too much), U for Understated (too little), or NA for Not Affected.
While in the process of posting from the journal to the ledger a company failed to post a $500 credit to Accounts Receivable. The effect of this error will be that Group of answer choices A. Accounts Receivable will be understated. B. the error will overstate the debits listed in the journal. C. the trial balance will not balance. D. the total credits in the trial balance will be larger than the total debits.
The company in the following question has made errors in accounting for the given transaction. State how these errors affected the financial statements. Your response should include both the direction of the effect (understatement / overstatement) and the amount of the effect for assets, liabilities, and shareholders’ equity. If your response is “No Effect”, please choose this option – no partial credit will be given for blank responses even if you “meant” no effect. (Hint: Think about what the correct way (or amounts) of accounting for the transaction would be, and compare it to what the company in the question actually did). Assume that Illini Chemicals had, instead of amortizing 20 percent of the R&D costs (as stated in the previous question), amortized 40 percent of the R&D costs during 2020. What would the impact of this amortization be on operating cash flows for the 2020 fiscal year (ignoring the impact of taxes)?
If 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 of the following is the incorrect effect of counterbalancing errors?a. None of the statements is incorrect. b. The statement of financial position at the end of the first period is incorrect. c. The income statements for three successive periods are incorrect. d. The statements of financial position at the end of the second period is correct.
The accountant for Kerns company mistakenly posted an expense amount as an asset in the general ledger. What is the financial statement impact of this error?
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.
Which of the following is not a characteristic of non-counterbalancing error? Group of answer choices a.If the net income of one year is understated due to non-counterbalancing error, the net income of subsequent year is also affected. b.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. c.If not detected, this is not automatically corrected in the next accounting period. d.The income statement of the period in which the non-counterbalancing error is committed is misstated.
It is obvious that an error occurred in the preparation and/or posting of closing entries if Group of answer choices A. all revenue and expense accounts have zero balances. B. all balance sheet accounts have zero balances. C. the retained earnings account is debited for the amount of the net loss of the period. D. the income summary account is debited for the amount of the net income for the period.
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 loss
A company has a history of losses and has a negative balance (a debit) in retained earnings. On the balance sheet, what should this account be called? Group of answer choices Retained earnings, with amount shown as a negative Accumulated deficit, with amount shown as a negative Negative retained earnings, with amount shown as a negative
Which of the following statements is incorrect? Group of answer choices A. The accounting equation must always remain in balance. B. Liability accounts are increased by debit entries and decreased by credit entries. C. Expense accounts normally have debit balances. D. Common Stock and Retained Earnings accounts are increased by credit entries and decreased by debit entries.