Do not record transactions that do not affect inventory quality. A recorded inventory transaction has actually taken place.
Records of inventory purchases made during the accounting period. The purchase account is increased by direct debit. The manufacturing costs of the goods sold are overestimated by the same amount. An overstatement of cost of goods sold will result in an understatement of net income and retained earnings by the original margin of error.
If the auditor is dissatisfied with the accuracy of the closing balance sheet and may be materially increase.
Inventory write-downs affect both the income statement and the balance sheet. Write-offs are treated as expenses. This means your net income and tax liability will be reduced. Therefore, a decrease in net income will reduce a company's retained earnings and reduce shareholders' equity on the balance sheet.
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Answer: Definition the problem.
Explanation:
In trying to solve a problem, the first and the most basic step to take is to identify or define the problem, this stage involves determining the circumstances and situation as it helps one to be focused and pay attention to what the real problem is.
It is the first step and the most important, although it is most times difficult.
Defining the problem must answer the question "why", "who", "where","what", "how" and "when".
Defining the problem helps one to gain control over the situation.
Answer:
The first journal entry was not the most appropriate, but since the mistake was correctly adjusted at the end of the year, both assets and expenses will be the same whether they did it correctly the first time or they had to adjust a mistake at the end of the year.
E.g. something like this happened
October 1, rent expense for 1 year
Dr Rent expense 12,000
Cr Cash 12,000
December 31, adjustment to rent expense
Dr Prepaid rent 10,000
Cr Rent expense 10,000
they should have recorded it as:
October 1, prepaid rent for 1 year
Dr Prepaid rent 12,000
Cr Cash 12,000
December 31, adjustment to rent expense
Dr Rent expense 2,000
Cr Prepaid rent 2,000
Whichever way you recorded the transactions, the balances a the end of the year would be:
prepaid rent (asset) $10,000
rent expense (expense) $2,000
Answer:
The value of a firm's final product is the selling price whereas value added refers to the addition of value to the raw material (intermediate products).
Explanation:
The term "value added" describes the enhancement a company gives to its product before offering it to the customer. It can be considered as an extra special feature added by a company to increase the value of a final product.
