Determine the Impact on the Balance Sheet Accounts If the Following

question 125

Essay

Determine the impact on the balance sheet accounts if the following information is not used to adjust the accounts of Mood Food Company for the month of January, 2018. Round answers to the nearest dollar.
1. The company rents extra office space to Beulah, CPAs. Beulah pays the $6,000 rent annually on January 1.
2. The company has an outstanding loan to its President in the amount of $150,000. The loan accrues interest at the annual rate of 6%. Principal and interest are due January 1, 2020.
3. The company completed work on a project during January that was not yet billed to the client. The client will be charged $3,100.

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Definitions:

Fraudulent Alteration

The unauthorized modification of a document with the intention to deceive for personal gain or to harm another party.

Liabilities

Financial or legal obligations that an entity is required to pay or resolve in the future.

Promissory Note

A written promise to pay a specified sum of money to a designated party on demand or at a fixed or determinable future time.

Fictitious-Payee Rule

A legal principle that protects banks from liability when funds are withdrawn by a person not entitled to them, if the drawer's negligence contributed to the forgery.