Accrued salaries payable of P102,000 were not recorded at December 31, 2014 by Voodoo Jester Company. Also office supplies on hand of P48,000 at December 31, 2015 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What was the effect of these two errors? A. 2015 net income understated P150,000 and December 31, 2015 retained earnings understated P48,000. B. 2015 net income and December 31, 2015 retained earnings understated P48,000.
Accrued salaries payable of P102,000 were not recorded at December 31, 2014 by Voodoo Jester Company. Also office supplies on hand of P48,000 at December 31, 2015 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What was the effect of these two errors? A. 2015 net income understated P150,000 and December 31, 2015 retained earnings understated P48,000. B. 2015 net income and December 31, 2015 retained earnings understated P48,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Accrued salaries payable of P102,000 were not recorded at December 31, 2014 by Voodoo Jester Company. Also office supplies on hand of P48,000 at December 31, 2015 were erroneously treated as expense instead of supplies inventory. Neither of these errors was discovered nor corrected. What was the effect of these two errors?
A. 2015 net income understated P150,000 and December 31, 2015
B. 2015 net income and December 31, 2015 retained earnings understated P48,000.
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