Ask Me Help Desk

Ask Me Help Desk (https://www.askmehelpdesk.com/forum.php)
-   Accounting (https://www.askmehelpdesk.com/forumdisplay.php?f=19)
-   -   Preparing schedule to correct net income. (https://www.askmehelpdesk.com/showthread.php?t=588506)

  • Jul 20, 2011, 10:52 AM
    keith6292
    1 Attachment(s)
    Preparing schedule to correct net income.
    Please see attachment.

    I am not sure how this form needs to be filled out. I am not looking for the answers, I am just looking for someone to help explain this to me.

    Thanks




  • Jul 20, 2011, 12:58 PM
    pready

    You need to analyze each of the numbered situations. This means figuring out what the original journal entry or adjsting entry was. Next you need to figure out what the correcting journal entry will be so that you can figue out whether to add an amount to net income (plus revenue) or to deduct from net income (plus expenses).

    For example situation number 1: You had 2 adjustments for accrued salaries, so your adjusting entry would have been:
    Debit Salaries Expense and Credit Salaries Payable times 2. You need to reverse one of the adjusting entries so your correcting entry will be:
    Debit Salaries Payable and Credit Salaries expense.

    Now since you are crediting an expense account you will be adding the amount to net income because you are reducing your expenses.

    Now you are ready to work on the other numbered situations.
  • Jul 20, 2011, 05:27 PM
    keith6292
    Comment on pready's post
    Can you show me how that one example should be entered on that sheet?
  • Jul 20, 2011, 06:49 PM
    pready

    Under Add:
    Correction of Accrued Salaries $800
    Or:
    Decrease in Salaries Expense $800

  • All times are GMT -7. The time now is 11:02 PM.