For each of the following situations, indicate the effect on assets, net income, andretained earnings at December 31, 2020 and 2021 as follows:• O if the financial statement element is overstated.• U if the financial statement element is understated.• NE if there is no effect on the financial statements.Provide a brief explanation for your choice eg NI U – expenses too highNote: please present in a table form a) Depreciation expense on machinery is too high for 2020 and the 2021depreciation expense is correct. b) A 3-year rental agreement was signed on Jan. 1 2020 and recorded as aprepaid asset. No rent expense has been recognized. c) 2019 ending inventory was overstated by $10,000; 2020 inventoryunderstated by $8,000; 2021 inventory was correct.

For each of the following situations, indicate the effect on assets, net income, andretained earnings at December 31, 2020 and 2021 as follows:• O if the financial statement element is overstated.• U if the financial statement element is understated.• NE if there is no effect on the financial statements.Provide a brief explanation for your choice eg NI U – expenses too highNote: please present in a table form a) Depreciation expense on machinery is too high for 2020 and the 2021depreciation expense is correct. b) A 3-year rental agreement was signed on Jan. 1 2020 and recorded as aprepaid asset. No rent expense has been recognized. c) 2019 ending inventory was overstated by $10,000; 2020 inventoryunderstated by $8,000; 2021 inventory was correct.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 1EA: Match the correct term with its definition. A. cost principle i. if uncertainty in a potential...

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For each of the following situations, indicate the effect on assets, net income, and retained earnings at December 31, 2020 and 2021 as follows: • O if the financial statement element is overstated. • U if the financial statement element is understated. • NE if there is no effect on the financial statements. Provide a brief explanation for your choice eg NI U – expenses too high Note: please present in a table form a) Depreciation expense on machinery is too high for 2020 and the 2021 depreciation expense is correct. b) A 3-year rental agreement was signed on Jan. 1 2020 and recorded as a prepaid asset. No rent expense has been recognized. c) 2019 ending inventory was overstated by $10,000; 2020 inventory understated by $8,000; 2021 inventory was correct. d) A machine with a 15-year useful life was expensed when purchased in 2020. e) Did not accrue interest expense on a note payable at Dec 31 2020. Interest expensed when paid in 2021.
Refer to the information for Cox Inc. above. What amount would Cox record as depreciation expense at December 31, 2020, if the double-declining-balance method were used? a. $187,200 b. $192,000 c. $195,200 d. $312, 000
State the effect of the following errors if OVERSTATED, UNDERSTATED, or NO EFFECT. NO. ERRORS EFFECT IN 1. Omission of accrued expense in year 2021 Retained Earnings, 12/31/2022 2. Omission of prepaid expense in year 2021 Net income of 2022 3. Omission of accrued income in year 2021 Asset, 12/31/2022 4. Omission of unearned income in year 2021 Income of 2022 5. Sales of 2021 recorded as sales of 2022 Retained Earnings, 12/31/2022 6. Purchases of 2021 recorded as purchases of 2022 Retained Earnings, 12/31/2022 7. Inventory, 12/31/2021 is overstated Net income of 2022 8. Inventory, 1/1/2021 is understated Net income of 2022 9. Depreciation of 2021 is understated Net income of 2022 10. Interest income is recorded as Rent Income Net income
1. Determine the profit or loss for the year ended 30 September 2019 (Use comparison method) 2. Explain TWO (2) disadvantages of using comparison method when determining profit or loss for accounting period from incomplete record.
The following are the typical classifications used in a balance sheet: a. Current assets f. Current liabilities b. Investments g. Long-term liabilities c. Property, plant, and equipment h. Paid-in capital d. Intangible assets i. Retained earnings e. Other assets Required:For each of the following 2021 balance sheet items, use the letters above to indicate the appropriate classification category. (If the item is a contra account, select the appropriate letter with a minus sign.) Interest Payable __ Franchise __ Accumulated Depreciation __ Prepaid Insurance (for 2022) __ Bonds Payable (due in 10 years) __ Current Maturities of Long-Term Debt __ Notes Payable (due in 3 months) __ Long-Term Receivables __ Restricted Cash (which will be used to retire bonds in 10 years) __ Supplies __ Machinery __ Land (used in operations) __ Deferred Revenue (for 2022) __ Copyrights __ Common Stock __ Land (held for speculation) __ Cash equivalents __ Salaries Payable __
In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 net income? Group of answer choices a. Overstated b. Understated c. Cannot be determined based on the given information. d. No effect
Instruction: Fill in the blank on the type/nature of the adjustment or the pro-forma entry of the adjustment on the following: 1. The pro-forma adjusting entry to record the interest expense during the reporting period. 2. The expense account used to record the decline in value of assets due to wear and tear. 3. The pro-forma entry to record the estimated accounts that are uncollectible using the allowance method. 4. The expense account used for accounts that could not be collected to bring this account to its net realizable value. 5. The pro-forma entry to record the expense representing the uncollected accounts from customers using the direct method.
1. Prepare a multi-step statement of fiancial performance for 2020 showing expenses by function. Ignore calculation of EPS. 2. Prepared a retained earnings section of the statement of changes in equity for 2020. 3. Prepare a journal entry to record the depreciation expense omitted by mistake in 2019.
In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 net income? a. Understated b. No effect c. Cannot be determined based on the given information. d. Overstated
‏Find out the missing value assets in an accounting equation if liabilities is OMR 320000 and capital is OMR 119000 Select one : O a . OMR 439000 assets O b . OMR 201000 assets O c . OMR 349000 assets O d . OMR 102000 assets Clear my choice
How is the valuation of cuIrent assets affected if the company follows IFRS? ( OValuation is based on historical cost. OValuation is based on market adjustments. OValuation is based on LCM accounting. O Assets are expensed immediately. Aliability created for receiving cash for future services to be provided is termed O service revenue. O estimated warranty payable. Ounearned revenue. Oaccrued liability.
Classify the accounts listed below by matching the account name with one of the following financial statementsections in which the account would be reported:a. Current Assetsb. Fixed Assetsc. Intangible Assetsd. Current Liabilitye. Long-Term Liabilityf. Owners’ Equityg. Revenuesh. Operating Expensesi. Other Income/Expense____ 31. Buildings____ 32. Accumulated Depreciation - Buildings____ 33. Depreciation Expense____ 34. Trademarks____ 35. Amortization Expense____ 36. Repairs Expense____ 37. Land Improvements____ 38. Gain on sale of equipment____ 39. Loss on disposal of asset____ 40. Loss from Impaired Goodwill