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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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