Effects of errors on financial statements The accountant for Healthy Life Consulting, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($27,240) and (b) accrued wages ( $6,940). Indicate the effect of each error, considered individually, on the income statement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Enter all amounts as positive numbers. Enter "0" in those spaces where there is no overstatement or no understatement. Error (b) The adjusting entry for accrued wages ($6,940) was omitted.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Effects of errors on financial statements The accountant for Healthy Life Consulting, a medical services consulting firm,
mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($27,240) and (b) accrued wages (
$6,940). Indicate the effect of each error, considered individually, on the income statement for the current year ended
July 31. Also indicate the effect of each error on the July 31 balance sheet. Enter all amounts as positive numbers. Enter
"0" in those spaces where there is no overstatement or no understatement. Error (b) The adjusting entry for accrued
wages ($6,940) was omitted.
Transcribed Image Text:Effects of errors on financial statements The accountant for Healthy Life Consulting, a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue earned during the year ($27,240) and (b) accrued wages ( $6,940). Indicate the effect of each error, considered individually, on the income statement for the current year ended July 31. Also indicate the effect of each error on the July 31 balance sheet. Enter all amounts as positive numbers. Enter "0" in those spaces where there is no overstatement or no understatement. Error (b) The adjusting entry for accrued wages ($6,940) was omitted.
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