Indicate the effect of the given errors:

On the net income of the current year, On the total current assets as of the end of the year, On the total current liabilities as of the end of the year, and On the balance of retained earnings as of the end of the year.

Write the words overstated, understated, or no effect in each space provided.

Error	Net Income	Current Assets	Current Liabilities	Retained Earnings
1. Ending merchandise inventory was understated.
2. Sales on account was understated.
3. Cash purchases was understated.
4. Purchases on account was overlooked.
5. Prepaid taxes were overlooked.
6. Unearned income was understated.
7. Accrued wages was understated.
8. Accrued interest income was understated.
9. Doubtful accounts were not adjusted.
10. Depreciation of the equipment was understated.
11. Goods sold and in transit, term: FOB destination. Included in the count.
12. Goods purchased and in transit, term: FOB shipping point. Purchase not taken up, and not included in the count.