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For the Year Ending June 30, Island Clinical Services Mistakenly

Question 39

Essay

For the year ending June 30, Island Clinical Services mistakenly omitted adjusting entries for
(1) $1,500 of supplies that were used,
(2) unearned revenue of $4,200 that was earned, and
(3) insurance of $5,000 that expired. What is the combined effect of these errors on
(a) revenues,
(b) expenses, and
(c) net income for the year ending June 30?

Correct Answer:

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(a) Revenues were understated ...

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