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Show How the Following Independent Errors Will Affect Net Income

question 67

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Show how the following independent errors will affect net income on the Income Statement and the stockholders' equity section of the Balance Sheet using the symbol + (plus) for overstated, - (minus) for understated, and 0 (zero) for no effect. Show how the following independent errors will affect net income on the Income Statement and the stockholders' equity section of the Balance Sheet using the symbol + (plus) for overstated, - (minus) for understated, and 0 (zero) for no effect.   1. Ending inventory in 2014 overstated. 2. Failed to accrue 2014 interestrevenue. 3. A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to Maintenance Expense in 2014.   4. Failed to count office supplies on hand at 12/31/14. Cash expenditures have been charged to Supplies Expense during the year 2014.5. Failed to accrue 2014 wages.6. Ending inventory in 2014 understated. 7. Overstated 2014 depreciationexpense; 2015 expense correct. 1. Ending inventory in 2014 overstated."2. Failed to accrue 2014 interestrevenue."3. A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to Maintenance Expense in 2014. Show how the following independent errors will affect net income on the Income Statement and the stockholders' equity section of the Balance Sheet using the symbol + (plus) for overstated, - (minus) for understated, and 0 (zero) for no effect.   1. Ending inventory in 2014 overstated. 2. Failed to accrue 2014 interestrevenue. 3. A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to Maintenance Expense in 2014.   4. Failed to count office supplies on hand at 12/31/14. Cash expenditures have been charged to Supplies Expense during the year 2014.5. Failed to accrue 2014 wages.6. Ending inventory in 2014 understated. 7. Overstated 2014 depreciationexpense; 2015 expense correct. 4. Failed to count office supplies on hand at 12/31/14. Cash expenditures have been charged to Supplies Expense during the year 2014.5. Failed to accrue 2014 wages.6. Ending inventory in 2014 understated."7. Overstated 2014 depreciationexpense; 2015 expense correct."


Definitions:

Supply Shift

A change in the supply curve of goods or services caused by factors other than price changes, leading to a new equilibrium in the market.

Good Z

A hypothetical product or service used in economic examples to discuss theories and concepts.

Cornstalks

The stems of corn plants, which can be used as fodder for animals, in biofuel production, or as a raw material in various industries.

Complements In Production

Goods that are produced together in the same process or that increase productivity when used together.

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