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Hornby Company purchased a machine on January 1, 2019, for $10,000. The company bookkeeper incorrectly used a six-year life instead of a five-year life to
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Hornby Company purchased a machine on January 1, 2019, for $10,000. The company bookkeeper incorrectly used a six-year life instead of a five-year life to depreciate the machine. What would be the effect of this error on the 2019 financial statements?
Overstatement of assets and an understatement of liabilities.
Overstatement of assets offset by an understatement of shareholders' equity.
Overstatement of assets, profit, and shareholders' equity.
Overstatement of assets offset by an understatement of retained earnings.
Hornby Company purchased a machine on January 1, 2019, for $10,000. The company bookkeeper incorrectly used a six-year life instead of a five-year life to depreciate the machine. What would be the effect of this error on the 2019 financial statements?
| Overstatement of assets and an understatement of liabilities. | ||
| Overstatement of assets offset by an understatement of shareholders' equity. | ||
| Overstatement of assets, profit, and shareholders' equity. | ||
| Overstatement of assets offset by an understatement of retained earnings. |
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