Exercise 9. Effects of errors on financial statements The accountant for Maxim Medical Co., a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue, P10,390 and (b) accrued wages, P2,440. Indicate the effect of each error, considered individually, on the SCI for the current year ended December 31. Also indicate the effect of each error on the December 31 SFP. Record your answers by inserting the P amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (a) Error (b) Over- Over- stated stated 1. Revenue for the year would be 2. Expenses for the year would be 3. Net income for the year would be 4. Assets at December 31 would be 5. Liabilities at December 31 would be 6. Owner's equity at December 31 would be Under- stated Under- stated
Exercise 9. Effects of errors on financial statements The accountant for Maxim Medical Co., a medical services consulting firm, mistakenly omitted adjusting entries for (a) unearned revenue, P10,390 and (b) accrued wages, P2,440. Indicate the effect of each error, considered individually, on the SCI for the current year ended December 31. Also indicate the effect of each error on the December 31 SFP. Record your answers by inserting the P amount in the appropriate spaces. Insert a zero if the error does not affect the item. Error (a) Error (b) Over- Over- stated stated 1. Revenue for the year would be 2. Expenses for the year would be 3. Net income for the year would be 4. Assets at December 31 would be 5. Liabilities at December 31 would be 6. Owner's equity at December 31 would be Under- stated Under- stated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Exercise 9. Effects of errors on financial statements
The accountant for Maxim Medical Co., a medical services consulting firm, mistakenly omitted adjusting
entries for (a) unearned revenue, P10,390 and (b) accrued wages, P2,440. Indicate the effect of each
error, considered individually, on the SCI for the current year ended December 31. Also indicate the
effect of each error on the December 31 SFP. Record your answers by inserting the P amount in the
appropriate spaces. Insert a zero if the error does not affect the item.
Error (a)
Error (b)
Over-
Over- Under-
stated stated
stated
1. Revenue for the year would be
2. Expenses for the year would be
3. Net income for the year would be
4. Assets at December 31 would be
5. Liabilities at December 31 would be
6. Owner's equity at December 31 would be
Under-
stated](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6ca5b707-68bd-4693-9831-1dbfc5a758d5%2Ff6377b59-de0e-4d8f-a529-92565d9782b5%2Fhic1tn7_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 9. Effects of errors on financial statements
The accountant for Maxim Medical Co., a medical services consulting firm, mistakenly omitted adjusting
entries for (a) unearned revenue, P10,390 and (b) accrued wages, P2,440. Indicate the effect of each
error, considered individually, on the SCI for the current year ended December 31. Also indicate the
effect of each error on the December 31 SFP. Record your answers by inserting the P amount in the
appropriate spaces. Insert a zero if the error does not affect the item.
Error (a)
Error (b)
Over-
Over- Under-
stated stated
stated
1. Revenue for the year would be
2. Expenses for the year would be
3. Net income for the year would be
4. Assets at December 31 would be
5. Liabilities at December 31 would be
6. Owner's equity at December 31 would be
Under-
stated
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