Faulty Company's year end ifs December 31. Its external auditors have discovered that two years ago a couple of transactions were put through Faulty's books twice: $50,630 Dr Cash Cr Miscellaneous Revenue Dr Rent Expense Cr Cash $19,400 $50,630 $19,400 Assume that Faulty has such an incompetent bookkeeper that no bank reconciliations has been done since then. Solve the situation in one journal entry and ignore income tax implications. Required 1: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when credited? $ Required 2: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when debited? $ Re ed 3: Correction of in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when credited? $ Required 4: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when debited? $ Required 5: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Miscellaneous Revenue when debited? $ Required 6: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Miscellaneous Revenue account when credited? $
Faulty Company's year end ifs December 31. Its external auditors have discovered that two years ago a couple of transactions were put through Faulty's books twice: $50,630 Dr Cash Cr Miscellaneous Revenue Dr Rent Expense Cr Cash $19,400 $50,630 $19,400 Assume that Faulty has such an incompetent bookkeeper that no bank reconciliations has been done since then. Solve the situation in one journal entry and ignore income tax implications. Required 1: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when credited? $ Required 2: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Cash account when debited? $ Re ed 3: Correction of in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when credited? $ Required 4: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Rent Expense when debited? $ Required 5: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Miscellaneous Revenue when debited? $ Required 6: Correction of an error in previous years requires a prior period adjustment. What is the amount to report in the Miscellaneous Revenue account when credited? $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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Transcribed Image Text:Faulty Company's year end ifs December 31. Its external auditors have discovered that two years ago a
couple of transactions were put through Faulty's books twice:
$50,630
Dr Cash
Cr Miscellaneous Revenue
Dr Rent Expense
Cr Cash
$19,400
$50,630
$19,400
Assume that Faulty has such an incompetent bookkeeper that no bank reconciliations has been done
since then. Solve the situation in one journal entry and ignore income tax implications.
Required 1: Correction of an error in previous years requires a prior period adjustment. What is the amount
to report in the Cash account when credited? $
Required 2: Correction of an error in previous years requires a prior period adjustment. What is the amount
to report in the Cash account when debited? $
ed 3: Correction of
in previous years requires a prior period adjustment. What is the amount
to report in the Rent Expense when credited? $
Required 4: Correction of an error in previous years requires a prior period adjustment. What is the amount
to report in the Rent Expense when debited? $
Required 5: Correction of an error in previous years requires a prior period adjustment. What is the amount
to report in the Miscellaneous Revenue when debited? $
Required 6: Correction of an error in previous years requires a prior period adjustment. What is the amount
to report in the Miscellaneous Revenue account when credited? $
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