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Phyllis Vincent · Sep 17, 2007, 08:39 AM

A firm,'s bookkeeper mistakenly recorded the purchase of Equipment by increasing Equipment Exp and decreasing Cash. If not corrected how will this ;mistake affect the firm's financial statements

a- net income & assets will be overstated
b- net income & assets will be understated
c- net income will understated , total assets will be correct
d- total assets will be understated, net income will be correct
E non of the above

ScottGem · Sep 17, 2007, 08:41 AM

What do YOU think is the correct answer. We don't do your homework for you, but may confirm what you think the answer is.

nicespringgirl · Sep 17, 2007, 07:53 PM

What you should do is to credit in cash and debit in Equipment.
Both Cash and Equipment are under Asset... so you see what happens to asset after you decreasing cash?
It is an expense on Income statement, and balance sheet has nothing to do with Income statement except for the change in retained earnings that will result from net income.
So that would help you determine the answer... I hope.:)

ScottGem · Sep 18, 2007, 05:20 AM

First, may I call your attention to the guidelines for using the comments feature found here:
https://www.askmehelpdesk.com/feedba...ure-24951.html

Second, you really expect us to believe, worded the way you did, that this was not a homework question?

Phyllis Vincent · Sep 18, 2007, 07:47 AM

Originally Posted by ScottGem

First, may I call your attention to the guidelines for using the comments feature found here:
https://www.askmehelpdesk.com/feedba...ure-24951.html

Second, you really expect us to believe, worded the way you did, that this was not a homework question?

Sir, I am obviously in the wrong space. I am working through an old quick books guide trying to get up to speed in a Chamber of Commerce working situation. My apologies for misusing the system. I will not use it again. I do not have homework questions Thank you again and I am sorry to take up your time.

ScottGem · Sep 18, 2007, 08:09 AM

Hmmm, why would a QuickBooks guide ask questions like that? A QuickBooks guide is going to deal with how to use QuickBooks, not with Accounting 101 type questions.

Sorry Phyliss, you ARE in the wrong space if you are going to fib to us.