Accounting error are errors committed in accounting, which are not intentional.
<h3>What is accounting error?</h3>
These are unintentional errors committed in accounting, which are often corrected when spotted.
Matching each definition to each example is shown below:
- Ethan records $1,000 as a rent expense; however, the actual rent paid was $1,500 Original entry
- Ethan records stationery expenses as $251, but it should have been $215 Transposition
- Ethan records salaries of $5,000 as credits instead of debits. Reversal of entries
- Ethan made a subtraction error while analyzing the profit on the sale of an asset. Calculation
- Ethan completely overlooked stationery expenses of $115. Omission
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Answer:
People didn't want to trade their goods for other goods anymore.
Explanation:
People wanted to have both their item and another item (which they wanted to buy). Then currency was invented.
Answer and Explanation:
The computation is shown below:
a. For the cash paid
= Opening balance of account payable + total purchase - ending balance
= $169,000 + $298,000 - $141,000
= $326,000
b. The sale amount on account should be equivalent to the ending balance of account receivable i.e. $106,000
c. The beginning cash balance is
Closing cash balance = beginning cash balance + cash receipts - cash disbursements
$27,100 = Beginning cash balance + $119,500 - $120,150
So, the beginning cash balance is $27,750
Answer: the modification adds distinct goods or services at a price that reflects their stand-alone selling price.
Explanation:
When multiple goods or services are offered in the same contract they are not usually given their standalone price but rather a contract price that is less as a form of discount for getting all the goods at the same time.
When a modification is added however, that reflects the standalone price of goods added, the contract has to account for the contract modification because there are now multiple pricing conventions and this needs to be accounted for.
Answer: See explanation
Explanation:
1. Net profit margin ratio (%) for 2017 will be:
= Net income/Net sales
= 6220/89500
= 0.0695
= 6.95%
Net profit margin ratio (%) for 2018 will be:
= Net income/Net sales
= 6370/91000
= 0.07
= 7%
An improvement of (7% - 6.95%) = 0.05% occurs in net profit.
2. Asset turnover for the year ended 2017 will be:
Net sales/Average total assets
= 89500/64400
= 1.39
= 139%
Asset turnover for the year ended 2018 will be:
Net sales/Average total assets
= 91000/65000
= 1.4
= 140%
There's an improvement in the asset turnover in 2018.
3. Return on assets for 2017 will be:
= Net income/Average total asset
= 6220/64400
= 9.66%
Return on assets for 2018 will be:
= Net income/Average total asset
= 6370/65000
= 9.80%
An improvement in return on total assets of (9.80% - 9.66%) = 0.14% occurs.
Both component-net profit margin ratio or asset turnover- are responsible for the change in the company's return on assets.