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For the Year Ending December 31, Beard Clinical Supplies Co

Question 130

Essay

For the year ending December 31, Beard Clinical Supplies Co. mistakenly omitted adjusting entries for
(1) $9,800 of unearned revenue that was earned,
(2) earned revenue that was not billed of $10,200, and
(3) accrued wages of $7,000. Indicate the combined effect of the errors on
(a) revenues,
(b) expenses, and
(c) net income.

Correct Answer:

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(a) Revenues were understated ...

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