This is a multiple answer question. In July 2025, Earnest Company made a sale to a customer for $25,000 on account. The bookkeeper made the following entry: DR Accounts receivable $25,000; CR Interest Revenue $25,000. Before the books were closed in 2025, the Controller questioned whether sales during the year seems low. Upon investigation, the Accounting Manager reported that the $25,000 sale to a customer in July 2025 had been incorrectly reported as interest revenue. When the correcting entry is made, which components will be included? (Choose all that apply) A. debit retained earnings 1/1 $25,000 OB. credit accounts receivable $25,000 OC. debit cash $25,000 D. credit sales revenue $25,000 E. debit interest revenue $25,000 4

This is a multiple answer question. In July 2025, Earnest Company made a sale to a customer for $25,000 on account. The bookkeeper made the following entry: DR Accounts receivable $25,000; CR Interest Revenue $25,000. Before the books were closed in 2025, the Controller questioned whether sales during the year seems low. Upon investigation, the Accounting Manager reported that the $25,000 sale to a customer in July 2025 had been incorrectly reported as interest revenue. When the correcting entry is made, which components will be included? (Choose all that apply) A. debit retained earnings 1/1 $25,000 OB. credit accounts receivable $25,000 OC. debit cash $25,000 D. credit sales revenue $25,000 E. debit interest revenue $25,000 4

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 5C: It is February 16, 2020, and you are auditing Davenport Corporation's financial statements for 2019...

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