The following errors were discovered before preparing the closing entries of 2020 nominal accounts. Indicate the effects of each error on the net income of 2018, 2019 and 2020. For your answer, write the words overstated, understated, no effect or it depends in each space provided. Error 2018 2019 2020 1.) Ending inventory of 2019 was overstated. 2.) Ending inventory of 2020 was understated. 3.) Sales of 2018 was taken up in 2019. 4.) Sales of 2019 was taken up in 2020. 5.) Sales of 2019 was taken up in 2018 6.) Sales of 2020 was taken up in 2019. 7.) Purchases of 2018 was taken up in 2019. 8.) Purchases of 2019 was taken up in 2020. 9.) Purchases of 2020 was taken up in 2019. 10.) Accrued expenses at the end of 2018 was overstated. 11.) Accrued expenses at the end of 2019 was understated. 12.) Accrued expenses at the end of 2020 was overstated. 13.) Prepaid expenses at the end of 2018 was overstated. 14.) Prepaid expenses at the end of 2019 was overstated. 15.) Prepaid expenses at the end of 2020 was understated. 16.) Accrued income at the end of 2018 was overstated. 17.) Accrued income at the end of 2019 was understated. 18.) Accrued income at the end of 2020 was overstated. 19.) Unearned income at the end of 2018 was understated. 20.) Unearned income at the end of 2019 was overstated. 21.) Unearned income at the end of 2020 was understated. 22.) Depreciation of 2018 was overstated. 23.) Depreciation of 2019 was understated. 24.) Depreciation of 2020 was overstated. 25.) Doubtful accounts of 2018 was not taken up 26.) Doubtful accounts of 2019 was not taken up. 27.) Doubtful accounts of 2020 was not taken up.

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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The following errors were discovered before preparing the closing entries of 2020 nominal accounts. Indicate the effects of each error on the net income of 2018, 2019 and 2020. For your answer, write the words overstated, understated, no effect or it depends in each space provided.

	Error	2018	2019	2020
1.)	Ending inventory of 2019 was overstated.
2.)	Ending inventory of 2020 was understated.
3.)	Sales of 2018 was taken up in 2019.
4.)	Sales of 2019 was taken up in 2020.
5.)	Sales of 2019 was taken up in 2018
6.)	Sales of 2020 was taken up in 2019.
7.)	Purchases of 2018 was taken up in 2019.
8.)	Purchases of 2019 was taken up in 2020.
9.)	Purchases of 2020 was taken up in 2019.
10.)	Accrued expenses at the end of 2018 was overstated.
11.)	Accrued expenses at the end of 2019 was understated.
12.)	Accrued expenses at the end of 2020 was overstated.
13.)	Prepaid expenses at the end of 2018 was overstated.
14.)	Prepaid expenses at the end of 2019 was overstated.
15.)	Prepaid expenses at the end of 2020 was understated.
16.)	Accrued income at the end of 2018 was overstated.
17.)	Accrued income at the end of 2019 was understated.
18.)	Accrued income at the end of 2020 was overstated.
19.)	Unearned income at the end of 2018 was understated.
20.)	Unearned income at the end of 2019 was overstated.
21.)	Unearned income at the end of 2020 was understated.
22.)	Depreciation of 2018 was overstated.
23.)	Depreciation of 2019 was understated.
24.)	Depreciation of 2020 was overstated.
25.)	Doubtful accounts of 2018 was not taken up
26.)	Doubtful accounts of 2019 was not taken up.
27.)	Doubtful accounts of 2020 was not taken up.

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