For Each of the Following,indicate the Effect the Given Situation

question 86

Short Answer

For each of the following,indicate the effect the given situation would have on net income in the current period.
O overstate net income
U understate net income
N/A not applicable; no effect on net income
_____ recording prepaid costs as current expenses.
_____ recording an expense at more than the actual cost.
_____ failing to record the receipt of a payment by a customer on account.
_____ underestimating depreciation expense.
_____ failing to record some supplies received.
_____ recording deferred revenue as revenue.
_____ recording an expense as revenue.
_____ failing to record the company issuing additional shares of its own common stock.
_____ overestimating payroll tax expense.

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Definitions:

Indentured Servants

Workers who agreed to work for a certain period of time in exchange for passage to the New World and eventual freedom.

Diversified Economy

A diversified economy is one with a variety of sectors, industries, and activities that contribute to its growth, reducing reliance on any single economic sector.

Spanish Friars

Religious men from Spain belonging to various Catholic orders who were active in missionary work, often playing significant roles in the colonization and cultural integration in the Americas and the Philippines.