Given the Schedule Below,indicate the Impact of the Following Errors

question 128

Essay

Given the schedule below,indicate the impact of the following errors made during the adjusting entry process.Use a "+" followed by the amount for overstatements,a "-" followed by the amount for understatements,and a "0" for no effect.
(1)Recorded accrued salaries expense of $1,200 with a debit to Prepaid Salaries.
(2)The bookkeeper forgot to record $2,700 of depreciation on office equipment.
(3)Failed to accrue $300 of interest on a note receivable.
Ex.Failed to recognize that $600 of unearned revenues,previously recorded as liabilities,had been earned by year-end.

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Definitions:

Operating Cycle

The operating cycle is the duration of time that takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales.

Accounts Receivable

Outstanding payments due to a firm from its customers for delivered goods or services awaiting payment.

Cost of Goods Sold

The total direct costs attributed to producing goods, including materials and labor, which are sold during a certain period.

Total Asset Turnover

A financial ratio that measures a company’s effectiveness in using its assets to generate sales revenue.