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You Have Recently Started to Work for Thom Hanks, Manufacturers

question 31

Essay

You have recently started to work for Thom Hanks, manufacturers of cemetery markers and monuments. During your first month at work, you inadvertently recorded as an expense, about $6,000 of prepayments for insurance. The financial statements had been released within the company when you discovered your error. The month-end closing had not been completed, however, and you were able to correct the accounts without incident.
Required:
Prepare a short note to accompany the re-released financial statements explaining the mistake.


Definitions:

Partnership Interest

Ownership stake in a partnership, representing rights to its profits and assets.

Accounting Work

The activities involved in maintaining and auditing records and preparing financial reports for a business or individual.

Inventory

The total value of goods and materials held by a company for the purpose of resale or production.

Partnership Interest

An ownership share in a partnership that represents a portion of the entity's assets and income.

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