Determine the effect of the following errors on a companys total revenue, total expenses, and net income.

Determine the effect of the following errors on a company’s total revenue, total expenses, and net income. Indicate the effect by writing O for Overstated (too much), U for Understated (too little), or NA for NotAffected.

Transcribed Image Text:

Total Revenue Expenses Income Total Net Transactions Example: A check for $325 was written to pay on account. The accountant debited Rent Expense for $325 and credited Cash for $325. a. $420 was received on account from NA customers. The accountant debited Cash for $420 and credited Professional Fees for $420 b. The owner withdrew $1,200 for personal use. The accountant debited Wages Expense for $1,200 and credited Cash for $1,200 c. A check was written for $1250 to pay the rent. The accountant debited Rent Expense for $1,520 and credited Cash for $1,520 d. $1,800 was received on account from customers. The accountant debited Cash for $1,800 and credited the Capital account for 1,800 A check was written for $225 to pay the phone bill received and recorded earlier in the month. The accountant debited Phone Expense for $225 and credited Cash for $225 e.