Give the Correct Response to Each of the Following Events

question 116

Essay

Give the correct response to each of the following events:
(a)An overstatement of accrued wages payable by $2,000 at the end of 20x1 would cause retained earnings at the end of 20x2 to be ________ Overstated; ________ Understated by; correct
(assuming no correcting entry).
(b)A $6,000 purchase of merchandise on credit in 20x1 was not recorded in 20x1; but it was recorde in 20x2 when the cash was paid.It was discovered during 20x3.The merchandise was not included in the 20x1 ending inventory.Therefore, 20x1 income was: ________ Overstated; ________
Understated by; correct.
(c)The 20x2 ending inventory was Overstated $4,000 and no correcting entry has been made.Therefore the 20x3 net income is: ________ Overstated; ________ Understated by; ________
correct.

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Definitions:

Tariff

A tax imposed by a government on goods and services imported from other countries, increasing the cost of imported goods and services.

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A brand of motorcycles manufactured by the Yamaha Motor Company, known for their quality, performance, and innovation.

Emission Exhaust

Gases or particles released into the atmosphere from engines or other machinery.

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A tax imposed by a government on imported or exported goods, typically used to protect domestic industries or to generate revenue.