[keith6292]

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

[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.

[keith6292]

Can you show me how that one example should be entered on that sheet?

[pready]

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