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3 years ago

A company's financial statements may contain errors even if debits and credit balance because:

Business

1 answer:

emmasim [6.3K]3 years ago

6 0

Answer:

B. correct but equal amounts may have been posted to wrong accounts

Explanation:

It is possible that in the presence of the errors the debits and credits side remains balance.

Following errors may balance the debits and credits

Error of omission ( Transaction is totally omitted)
Error of commission (posting in wrong accounts by same value)
Error of Principle (Entry made against the principle of accounting)
Error of Original Entry (Wrong amount posted on both debit and credit sides)
Compensating error (Two errors compensate each others effect)

All of the above errors may present in case of balanced debit and credit sides.

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Answer:

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3 years ago

Read 2 more answers

How do i figure out a months ending capital

stealth61 [152]

Ending capital for the month = The month's beginning capital + Additional capital inflow for the month - additional capital outflow for the month

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3 years ago

lue Inc. has decided to raise additional capital by issuing $171,000 face value of bonds with a coupon rate of 11%. In discussio

Dafna1 [17]

Answer:

Explanation:

Value assigned to bonds =

Value of bonds without warrants/(value of bonds without warrants+value of warrants)*Issue price

Value assigned to warrants =

Value of warrants/(value of bonds without warrants+Value of warrants)

Value assigned to bonds = 115,200/(115,200+28,800) * 140,000 = 0.8*140,000 = 112,000

Value assigned to warrants = 28,800/144,000 * 140,000 = 28,000

Journal entries:

Dr Cash 140,000

Dr Discount on bonds payable (171,000-112,000) 59,000

Cr Bonds payable 171,000

Cr Paid in capital-Stock warrants 28,000

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3 years ago