overstated or understated earnings

Related BrainMass Solutions

• Inventory questions

  (Points: 4) assets overstated by $30,000;retained earnings understated by $30,000; net income statement understated by $30,000 assets overstated by $30,000;retained earnings understated by $30,000; no effect on the income statement

• Accounting Errors/Corrections

  b. retained earnings at December 31, 2011, was understated by $38,000 and 2011 income was overstated by $6,000. c. retained earnings at December 31, 2011, was understated by $30,000 and 2011 income was overstated by $10,000.

• Accounting Errors for Accrued Salaries

  C) 2007 net income to be overstated $27,000 and 2008 net income to be understated $24,000. D) 2008 net income and December 31, 2008 retained earnings to be understated $24,000 each.

• Risks of material misstatement: revenues, inventory

  As a result, what accounts are likely to be overstated or understated?

• Adjustment and Depreciation Expense

  No effect / Overstated c. Understated / No effect d.

• Revenue Recognition and Receivables

  Part 2 If a company recognizes revenue faster than justified, which of the following best describes whether A/R, inventory, and retained earnings are overstated or understated?

• Effect of Changes due to Accounting Errors

  B- 2011 net income and December 31, 2011 retained earnings to be understated $24,000 each. C- 2010 net income and December 31, 2010 retained earnings to be understated $51,000 each.

• Effect on financial statements if equipment was expensed

  The expense account to which the equipment's cost was charged would be overstated. The retained earnings and total stockholders' equity amounts on the statement of shareholder's equity would be understated.

• What is the effect of the omission of accrued liabilities for special insurance costs?

  Understated Overstated b. No effect No effect c. No effect Overstated d.