At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending working capital and on the Year 2 ending retained earnings balance? Year 1 Ending Working Capital Year 2 Ending Retained Earnings A Overstated Overstated B No effect Overstated C No effect No effect D Overstated No effect
At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending working capital and on the Year 2 ending retained earnings balance? Year 1 Ending Working Capital Year 2 Ending Retained Earnings A Overstated Overstated B No effect Overstated C No effect No effect D Overstated No effect
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter3: The General Journal And The General Ledger
Section: Chapter Questions
Problem 7E: Determine the effect of the following errors on a companys total revenue, total expenses, and net...
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At the end of Year 1, Ritzcar Co. failed to accrue sales commissions earned during Year 1 but paid in Year 2. The error was not repeated in Year 2. What was the effect of this error on Year 1 ending
|
Year 1 Ending Working Capital |
Year 2 Ending Retained Earnings |
A |
Overstated |
Overstated |
B |
No effect |
Overstated |
C |
No effect |
No effect |
D |
Overstated |
No effect |
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