0
What else can I help you with?
If the adjustment for depreciation for the year is inadvertently omitted will the assets on the balance sheet at the end of the period be understated?
No they will be overstated as depreciation will not have been taken into account.
What happens to net income if inventory is understated?
If inventory is understated, net income is also understated because cost of goods sold will be overstated
How can you have negative accumulated depreciation?
Negative accumulated depreciation typically arises from accounting errors or adjustments rather than a standard practice. It may occur if an asset is revalued upward significantly, surpassing its original cost, or if prior depreciation amounts were overstated and then corrected. Additionally, if an asset is sold or disposed of without properly accounting for its depreciation, this can also lead to a negative balance. However, such situations are uncommon and often require careful review and adjustment in financial statements.
If an adjusting entry is not made for an accrued expense?
If adjusting entry not made then profit will be overstated while the expenses will be understated.
If an adjustment is needed for unearned revenues...?
If an adjustment is needed for unearned revenues, the liability is overstated and the related revenue is understated before adjustment. Another word for revenue is income.
If the adjustment for depreciation for the year is inadvertently omitted will the assets on the balance sheet at the end of the period be understated?
No they will be overstated as depreciation will not have been taken into account.
What happens to net income if inventory is understated?
If inventory is understated, net income is also understated because cost of goods sold will be overstated
How can you have negative accumulated depreciation?
Negative accumulated depreciation typically arises from accounting errors or adjustments rather than a standard practice. It may occur if an asset is revalued upward significantly, surpassing its original cost, or if prior depreciation amounts were overstated and then corrected. Additionally, if an asset is sold or disposed of without properly accounting for its depreciation, this can also lead to a negative balance. However, such situations are uncommon and often require careful review and adjustment in financial statements.
If the amount of uncollectible account expense is understated at year end?
net Accounts Receivable will be overstated.
If an adjusting entry is not made for an accrued expense?
If adjusting entry not made then profit will be overstated while the expenses will be understated.
What is overstated and understated?
Understated DefinedUnderstated amounts indicate a reported amount is not correct and the reported amount is less than the true amount.Overstated DefinedOverstated is the opposite of understated in accounting terminology. Accountants use this term to describe an incorrect reported amount that is higher than the true amount.
The adjusting entry to adjust supplies was omitted at the end of the year This would effect the income statements by having?
expenses understated and therefore net income overstated
Purchase of machinery costing 1200 was debited to the purchases acountas a resul the purchases account balance will be A overstated by 1200 B understated by 1200 c unaffected?
unaffected
If an adjustment is needed for unearned revenues...?
If an adjustment is needed for unearned revenues, the liability is overstated and the related revenue is understated before adjustment. Another word for revenue is income.
A company's month-end adjusting entry for Insurance Expense is 1000 If this entry is not made then expenses are understated by 1000 and net income is overstated by 1000?
Yes this is right statement as if some expenses are forgot to record it overstated the net income and reduces the expenses but in actual there is less net income then shown in income statement.
What is the effect on net profit if opening stock is undervalued?
If Opening Stock is undervalued, this will result in your Cost of Sales being understated and therefore Gross and Net Profit being overstated. Of course, since Opening Stock in this period is the last period's Closing Stock, this would mean that Closing Stock in the last period was understated too, meaning that Net Profit in the last period was understated. That doesn't make it OK though!
When are asset accounts overstated and expense accounts understated?
Asset accounts are overstated and expense accounts understated when a company capitalizes costs that should be recognized as expenses. This can occur if expenses related to maintenance or repairs are improperly recorded as asset improvements, inflating the asset's value on the balance sheet. As a result, this misrepresentation can lead to a distorted view of a company's financial health, as profits appear higher due to lower reported expenses. This practice can mislead investors and stakeholders about the true performance and condition of the business.
