An Inexperienced Accountant for Can't Add Company Recorded the Following

question 14

Essay

An inexperienced accountant for Can't Add Company recorded the following transactions in the records of the company for the year ended December 31, 2021. The controller has questioned the appropriateness of the entries since she thinks that they have not been recorded in accordance with generally accepted accounting principles. Profit for the year, including the entries described below, is $ 200,000. Instructions
a) For each of the above entries, indicate the concept or constraint that was violated.
b) Determine the correct profit for 2021.

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Definitions:

Income Distribution

The way in which total income is shared among the population or different segments of an economy.

Lorenz Curve

A graphical representation used in economics to show the distribution of income or wealth within a society, illustrating levels of inequality.

Personal Distribution

The distribution of income and wealth among individuals and households in an economy.

Gini Ratio

An index that quantifies the disparity in income distribution among a population, where 0 signifies complete equality and 1 denotes complete disparity.