It is required by GAAP that all companies must follow specific rules when it comes to thecompany’s reporting process. This allows for more consistency along with more uniformity for investors when they are looking to potentially invest in a company. By following GAAP standards, it allows for a more accurate representation of the company’s financial health.The four-step process was effectively utilized to correct and report all errors and changes. The trial balance was created and analyzed to determine what accounts needed adjusting entries. All applicable debits and credits were then recorded to insure accuracy in the accounts. Peyton was able to determine which accounts were incorrectly reported and the correct entries were made. After all errors and adjusting entries were finished, the balance sheet, income statement, and retained earnings statements were all revised to reflect the corrected accounts and amounts.
ReferencesBragg, S. (2019).Other comprehensive income. [online] AccountingTools. Available at: Chen, J. (2019).Debt Financing. [online] Investopedia. Available at: Investopedia. (2018).How do equity financing and debt financing affect a company's financials?. [online] Available at: -companys-financials-compared-effects-debt-financing.asp Kenton, W. (2019).How the Current Ratio Works as a Liquidity Ratio. [online] Investopedia. Available at: Kenton, W. (2019).How the Quick Ratio Works. [online] Investopedia. Available at: McClure, B. (2012).Evaluating Retained Earnings: What Gets Kept Counts. [online] Investopedia. Available at: Whalen, J., Jones, J. and Pagach, D. (2017).Intermediate Accounting: Reporting and Analysis. 2nd ed. [ebook] Boston.
- Fall '15
- Balance Sheet, Peyton