Problem

Indicate the effect of the following errors on each of the financial statement elements de...

Indicate the effect of the following errors on each of the financial statement elements described in the column headings in the table below. Use the following symbols: 0 = overstated, U = understated, and NE = no effect.

Error

Net Income

Total Assets

Total Liabilities

Retained Earnings

a. Recorded a dividend as an expense in the income statement.

 

 

 

 

b. Recorded unearned revenue as earned revenue in the income statement.

 

 

 

 

c. Failed to record accrued wages payable at the end of the accounting period.

 

 

 

 

d. Recorded a declared but unpaid dividend by debiting Dividends and crediting Cash.

 

 

 

 

e. Failed to disclose a pending lawsuit in the notes accompanying the financial statements.

 

 

 

 

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