Determine the effect of the following errors on a company's total revenue, total expenses, and net...

Determine the effect of the following errors on a company's total revenue, total expenses, and net income. Indicate the effect by selecting Overstated (too much), Understated (too little),or Not Affected.

Transactions	Total Revenue	Total Expenses	Net Income

Example: A check for $325 was written to pay on account. The accountant debited Rent Expense for $325 and credited Cash for $325.	Not Affected	Overstated	Understated
a. $615 was received on account from customers. The accountant debited Cash for $615 and credited Professional Fees for $615.
b. The owner withdrew $1,500 for personal use. The accountant debited Salary Expense for $1,500 and credited Cash for $1,500.
c. A check was written for $1,265 to pay the rent. The accountant debited Rent Expense for $1,625 and credited Cash for $1,625.
d. $2,100 was received on account from customers. The accountant debited Cash for $2,100 and credited the Capital account for $2,100.
e. A check was written for $525 to pay the phone bill received and recorded earlier in the month. The accountant debited Phone Expense for $525 and credited Cash for $525.

Expert Solution

Transation	Total Revenue	Total Expenses	Net Income

a. $615 was received on account from customers. The accountant debited Cash for $615 and credited Professional Fees for $615.	Overstated	Not Affected	Overstated
b. The owner withdrew $1,500 for personal use. The accountant debited Salary Expense for $1,500 and credited Cash for $1,500.	Not Affected	Overstated	Understated
c. A check was written for $1,265 to pay the rent. The accountant debited Rent Expense for $1,625 and credited Cash for $1,625.	Not Affected	Overstated	Understated
d. $2,100 was received on account from customers. The accountant debited Cash for $2,100 and credited the Capital account for $2,100.	Not Affected	Not Affected	Not Affected
e. A check was written for $525 to pay the phone bill received and recorded earlier in the month. The accountant debited Phone Expense for $525 and credited Cash for $525.	Not Affected	Overstated	Understated

ekkarill92 answered 3 years ago

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