Homework Answers
Answer: net income and total assets will be correctly stated.
Explanation: Here this error will not affect the arithmetical accuracy of the financial statement.Even though $800 is wrongly credited to cash instead of Fixed assets,the asset side is reducing in both cases.That means in this case income and Total asset balance is correct.this error can be rectified by passing following entry,
Cash A/C $800 Fixed assets A/C $800.
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