Test 1Determining the Effects of Omissions of Adjusting Entries

Using the following table, indicate the effect of the following errors of omission on the financial statements classifications listed. If as a result of the omission a classification is overstated, place a (+) in the appropriate space. An understatement is to be indicated by a (-). If the omission has no effect on the classification, place a (0) in the appropriate space.

Effect of Omission

Classification

a

B

C

d

e

f

g

Revenues

Expenses

Profit

Total Assets

Total Liabilities

Owner's Equity

a.Payment for repairs erroneously debited to Building Account.

b.Recorded collection of an account receivable by debiting Cash and crediting a revenue account.

c.Depreciation for the month was omitted.

d.Recorded twice an acquisition of office equipment on account.

e.Recorded the acquisition of office equipment for cash as a debit to Office Equipment and a credit to Depreciation expense.

f.Recorded cash payment for advertising by debiting Repairs Expense and crediting Cash.

g.Rendered services for cash but made no record of the transaction.