On December 31,2012,a Company Forgot to Record $7,000 of Depreciation

question 19

Essay

On December 31,2012,a company forgot to record $7,000 of depreciation on office equipment.What would be the effect on the assets,net income,and equity when it comes to the 2012 financial statements?

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Definitions:

Contribution Margin

Contribution Margin is the amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs or generate profit.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, culminating in the net income or loss.

Contribution Format

A type of income statement where costs are divided into variable and fixed categories, enabling analysis of contribution margin.

Variable Expense Ratio

The ratio of variable costs to total sales, indicating how variable expenses change with sales levels.