The following arc independent errors nude by a company that uses a periodic inve

Question

The following arc independent errors nude by a company that uses a periodic inventory system failure to record a purchase of inventory on credit expensing the purchase of a machine failure to accrue wages failure to record an allowance for uncollectibles including collections in advance as revenue including payments in advance as expenses failure to accrue warranty costs discount on a note payable issued for purchase of a machine is ignored failure to record depreciation expense on assets purchased during the year Next Level Indicate the effect of each of the preceding errors on the company's assets, liabilities, shareholders' equity, and net income in the year in which the error occurs. State whether the error causes an overstatement an understatement (-), or no effect (NE).

Explanation / Answer

Error Statement No Assets Liabilities Equity Net Income a NE - NE + b - NE NE - c NE - NE + d NE - NE + e NE - NE + f - NE NE - g NE - NE + h + + NE NE i + NE NE +

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