If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer pays its invoice, how will Oxbow’s December financial statements be impacted? a. Assets will be understated on the balance sheet , while revenues will be overstated on the income statement b. Assets will be understated on the balance sheet, while revenues will be understated on the income statement. c. Assets will be overstated on the balance sheet, while revenues will be overstated on the income statement. d. Assets will be overstated on the balance sheet, while revenues will be understated on the income statement.

Question

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Answer 1

Textbook Question

Chapter 3, Problem 1QC

If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer pays its invoice, how will Oxbow’s December financial statements be impacted?

a. Assets will be understated on the balance sheet, while revenues will be overstated on the income statement
b. Assets will be understated on the balance sheet, while revenues will be understated on the income statement.
c. Assets will be overstated on the balance sheet, while revenues will be overstated on the income statement.
d. Assets will be overstated on the balance sheet, while revenues will be understated on the income statement.

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.

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

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01:33

Students have asked these similar questions

If Oxbow Corporation does not record a sale made on account in December until a monthlater when the customer pays its invoice, how will Oxbow’s December financial statementsbe impacted?a. Assets will be understated on the balance sheet, while revenues will be overstated on theincome statement.b. Assets will be understated on the balance sheet, while revenues will be understated onthe income statement.c. Assets will be overstated on the balance sheet, while revenues will be overstated on theincome statement.d. Assets will be overstated on the balance sheet, while revenues will be understated on theincome statement.

For each of the following situations, identify whether a change in accounting estimate, change in accounting policy, or an accounting error has occurred. Also indicate whether the change or correction should be made prospectively or retrospectively. The accounting clerk did not record a shipment of product on the last day of the previous fiscal year, because the customer had not yet paid for the product. The shipment was made FOB shipping point. In the past, Uni-Focus Company used the cash basis of accounting. This year, the Company is changing to the accrual basis of accounting. Tri-Facet Ltd follows ASPE. Management of Tri-Facet decided to switch from using the taxes payable method to using the future income tax method.

Answer 2

Textbook Question

Chapter 3, Problem 1QC

If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer pays its invoice, how will Oxbow’s December financial statements be impacted?

a. Assets will be understated on the balance sheet, while revenues will be overstated on the income statement
b. Assets will be understated on the balance sheet, while revenues will be understated on the income statement.
c. Assets will be overstated on the balance sheet, while revenues will be overstated on the income statement.
d. Assets will be overstated on the balance sheet, while revenues will be understated on the income statement.

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.

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

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01:33

Answer 3

Textbook Question

Chapter 3, Problem 1QC

If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer pays its invoice, how will Oxbow’s December financial statements be impacted?

a. Assets will be understated on the balance sheet, while revenues will be overstated on the income statement
b. Assets will be understated on the balance sheet, while revenues will be understated on the income statement.
c. Assets will be overstated on the balance sheet, while revenues will be overstated on the income statement.
d. Assets will be overstated on the balance sheet, while revenues will be understated on the income statement.

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.

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

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01:33

Answer 4

Textbook Question

Chapter 3, Problem 1QC

If Oxbow Corporation dees not record a sale mace on account in December until a month later when the customer pays its invoice, how will Oxbow’s December financial statements be impacted?

a. Assets will be understated on the balance sheet, while revenues will be overstated on the income statement
b. Assets will be understated on the balance sheet, while revenues will be understated on the income statement.
c. Assets will be overstated on the balance sheet, while revenues will be overstated on the income statement.
d. Assets will be overstated on the balance sheet, while revenues will be understated on the income statement.

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.

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

Answer 8

Expert Solution & Answer

To determine

To identify: The impact of the financial statements for the month December.

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

To identify: The impact of the financial statements for the month December.

Answer 12

Answer to Problem 1QC

(Option b) Assets will be understated on the balance sheet, while the revenues will be understated on the income statement.

Answer 13

Explanation of Solution

Balance Sheet:

Balance Sheet summarizes the assets, the liabilities, and the Shareholder’s equity of a company at a given date. It is also known as the statement of financial status of the business.

Income statement:

Income statement is a financial statement that shows the net income or net loss by deducting the expenses from the revenues and vice versa.

In the given situation the Corporation O does not record a sale made on account in December until a month later when the customer pays its invoice.

b. As he fails to record the sale made on account, the asset (Accounts receivable account) will be understated on the balance sheet. As the revenue from the sale is not recorded, the sales revenue (revenue account) will be understated in the income statement.

Hence, option ‘a’, ‘c’ and‘d’ are the wrong answer as per the explanation and option ‘b’ is the correct answer.