24Which statement is incorrectregarding the financial statements? A)Current assets reported in the balance sheet are generally reported in order of their liquidity.B)Unearned Revenues are increased as a result of a product or service being provided.C)Expenses on the income statement are reported as they are incurred, not as they are paid.D)The statement of cash flows reports the inflows (sources) and outflow (uses) of cash during the accounting period. 25Which of the following would notrepresent a cash flow from investing activities?
Acc 311 - Exam I Form A Page 10 SECTION II (50 points). Where calculations are necessary, you MUST show your work to receive credit for your answers and to receive partial credit. Please try to be as neat and organized as possible. PROBLEM 1 (15 pts)Given the following list of possible errors, determine the effect of the error on specific assets, liabilities, and permanentstockholders’ equity accounts (Contributed Capital and /or Retained Earnings) by completing the chart below. Use (+) to indicate overstated, (–) to indicate understated, and (NE) to indicate no effect. Include the specific account affected, a sign and an amount. Assume that all entries have been recorded for the year, including closing entries. Transaction (a) is completed as an example.a.The entry to record the purchase of $800 of equipment on account was never recorded.b.The entry to record the purchase of $1,000 of supplies for cash was recorded as a debit to supplies expense and a credit to accounts payable. The supplies were used immediately.c.A $900 cash sale was recorded as $90.d.A $300 payment on accounts payable was never recorded.e.A $400 credit sale was posted as a debit to sales revenue and a credit to accounts receivable.f.A $6,000 investment by stockholders was recorded as a debit to cash and a credit to investment in marketable securities.g.On December 30, a $2,000 sale on account was made and recorded. However, the goods were not delivered to the customer until January 2. Ignore inventory and COGS effects. Total Assets Total Liabilities Stockholders’ Equity a. Equipment -$800 Accounts payable -$800 NE b. c. d. e. f. g. Assume that all entries have been recorded for the year, including closing entries, write journal entries on the next page to correct the effects of errors e., f. and g., above, on the permanent accounts.
Acc 311 - Exam I Form A Page 11 e. ACCOUNTS DEBITCREDIT f. ACCOUNTS DEBITCREDIT g. ACCOUNTS DEBITCREDIT
Acc 311 - Exam I Form A Page 12
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