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    newbrat2's Avatar
    newbrat2 Posts: 8, Reputation: 1
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    #1

    Apr 24, 2009, 03:47 PM
    Account balances
    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.
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Apr 24, 2009, 10:24 PM

    Ditto.
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