In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 revenue and expenses? a.Revenue - understated; expenses - overstated b.Revenue - overstated; expenses - overstated c.Revenue - understated; expenses - understated d.Revenue - overstated; expenses - understated

In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 revenue and expenses? a.Revenue - understated; expenses - overstated b.Revenue - overstated; expenses - overstated c.Revenue - understated; expenses - understated d.Revenue - overstated; expenses - understated

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter4: Income Measurement And Accrual Accounting

Section: Chapter Questions

Problem 4.23E: The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent...

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In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 revenue and expenses? a. Revenue - understated; expenses - understated b. Revenue - overstated; expenses - overstated c. Revenue - understated; expenses - overstated d. Revenue - overstated; expenses - understated
In year 2022, collection of interest income is credited to Interest Expense. What is the effect of the error in year 2022 net income? Group of answer choices a. Overstated b. Understated c. Cannot be determined based on the given information. d. No effect
a. What amount should be reported as interest expense for 2021? b. If no correction is made, by what amount would interest expense for 2021 be understated?
A-1. What is the NET EFFECT of the errors in PERFECT’s 2020 net income? (After your numerical figure, immediately write OVER if overstated or UNDER if understated, example: XXX-OVER or XXX-UNDER) . A-2. What is the NET EFFECT of the errors in PERFECT’s 2021 net income?(After your numerical figure, immediately write OVER if overstated or UNDER if understated, example: XXX-OVER or XXX-UNDER) .
a. how much should TRUE recognize as gain or loss on extinguishment? b. how much should TRUE recognize as interest expense for the year ended, December 31, 2021?
State the effect of the following errors if OVERSTATED, UNDERSTATED, or NO EFFECT. NO. ERRORS EFFECT IN 1. Omission of accrued expense in year 2021 Retained Earnings, 12/31/2022 2. Omission of prepaid expense in year 2021 Net income of 2022 3. Omission of accrued income in year 2021 Asset, 12/31/2022 4. Omission of unearned income in year 2021 Income of 2022 5. Sales of 2021 recorded as sales of 2022 Retained Earnings, 12/31/2022 6. Purchases of 2021 recorded as purchases of 2022 Retained Earnings, 12/31/2022 7. Inventory, 12/31/2021 is overstated Net income of 2022 8. Inventory, 1/1/2021 is understated Net income of 2022 9. Depreciation of 2021 is understated Net income of 2022 10. Interest income is recorded as Rent Income Net income
Communication (income statement): The balance of Interest Expense from accruing interest to be paid has what effect on the income statement in the current year? Multiple Choice A. Decreases net income. B. No effect. C. Increases net income.
4. What is the net effect of the above errors in the 2021 net income? (If understated, put a negative (-) sign before the numerical value)
What is the effect of omission of prepaid expense in net income during the year of error? a. Overstated b. Cannot be determined based on the given information c. Understated d. No Effect
1. What amount should be reported as net effect of the errors on net income for 2020? a. 250000 understated b. 250000 overstated c. 500000 understated d. 0 2. What amount should be reported as net effect of the errors on retained earnings for December 31, 2021? a. 1150000 understated b. 1150000 overstated c. 900000 understated d. 900000 overstated 3. What amount should be reported as net effect of the errors on net income for 2021? a. 1150000 understated b. 1150000 overstated c. 1250000 understated d. 1250000 overstated
Which of the following revenue whose recognition is put off into the future even though payment has been received now? deferred revenue accrued revenue service rvenue sales revenue
which of the following transactions and events would result in animprovement in Interest Coverage Ratio?A. receiving cash for unearned sales revenueB. a payment of income tax owing from the previous periodC. an adjustment for accrued interest revenueD. A and B onlyE. A and C onlyF. B and C onlyG. All of the aboveH. None of the above