FIN 324 EXercises - Question 1 How would the following...

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Question 1 How would the following errors affect the account balances and the basic accounting equation, Assets = Liabilities + Owners' Equity ? How do the misstatements affect income? 1. The purchase of a truck is recorded as an expense instead of an asset. 2. A cash payment on accounts receivable is received but not recorded. 3. Fictitious sales on account are recorded. 4. A clerk misreads a handwritten invoice for repairs and records it as $1,500 instead of $1,800. 5. Payment is received on December 31 for the next three months' rent and is recorded as revenue. Question 2 Brady Company sells imported goods made in India. One product it sells is a wooden music box. The music boxes cost Brady $65, and Brady charges its customers a price of $250.Brady's cost of capital is 12%. On average, an entire year elapses between the time Brady pays for a music box and the time Brady collects the cash from the sale of the music box. What are Brady's annual financial holding costs per unit for the wooden music boxes? Question 3
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This note was uploaded on 01/05/2012 for the course 101 melissa jo taught by Professor Acc101 during the Spring '11 term at Aarhus Universitet.

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FIN 324 EXercises - Question 1 How would the following...

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