Question: Determine the effect of the following errors
Determine the effect of the following errors on a company’s total revenue, total expenses, and net income. Indicate the effect by writing O for Overstated (too much), U for Understated (too little), or NA for Not Affected.
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Total Total Net Transactions Revenue Expenses Income Example: A check for $325 was written to pay on account. The accountant debited Rent Expense for $325 and credited Cash for $325. a. $615 was received on account from NA U customers. The accountant debited Cash for $615 and credited Professional Fees for $615. b. The owner withdrew $1,500 for personal use. The accountant debited Salary Expense for $1,500 and credited Cash for $1,500. c. A check was written for $1,265 to pay the rent. The accountant debited Rent Expense for $1,625 and credited Cash for $1,625. d. $2,100 was received on account from customers. The accountant debited Cash for $2,100 and credited the Capital account for $2,100. e. A check was written for $525 to pay the phone bill received and recorded earlier in the month. The accountant debited Phone Expense for $525 and credited Cash for $525.
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> How do Accounts Payable and Accounts Receivable differ?
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> Explain why the term debit doesn’t always mean “increase” and why the term credit doesn’t always mean “decrease.”
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> How are the three financial statements shown in this chapter connected?
> What are footings in accounting?
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> The Personnel Department at LastCall Enterprises handles many administrative tasks for the two divisions that make up LastCall: LaidBack and StressedOut. LaidBack division manages the company’s traditional business line. This business,
