Indicate the impact that each of the following errors or omissions in 2020 would have on a company's 2020 net profit, assets and liabilities (year end is 31 December). Ignore the impact of taxation.

Place the symbols U = Understate, O = Overstate or NE = No Effect in the appropriate box. Be sure to place an answer in every box (screenshot) including dollar amounts.

(a)Capitalised research costs of $200,000 that should have been expensed. (3 marks)

(b)Underestimated the allowance for doubtful debts by $10,000. (3 marks)

(c)Did not record depreciation of $20,000. (3 marks)

(d)Did not adjust unearned revenue account to reflect that $18,000 was earned by year end. (3 marks)

CoursHeroTranscribedText

Transaction Net Profit Assets Liabilities (a) (b) (c) (d)