The CPA firm auditing Cathy Company found that assets and equity were overstated. Which of the following errors could have been the cause? Failing to make the adjustment to record interest accumulated on a note payable. Failing to make the adjustment to record revenue which had been earned, but not yet billed to customers. Failing to make the adjustment to record the consumption of utilities which have not been paid or recorded. O Failing to make the adjustment to record the use of prepaid insurance. Cathy Company operates a cleaning service. The grid below is a list of possible effects on the Income Statement and the Balance Sheet. The code is: += increase; decrease; NE = no effect Revenue Expense Net Income Assets Liabilities Equity +1,000 +1,000 NE +1,000 1. +1,000 NE +600 NE +600 +600 III. NE NE NE IV. +600 NE +600 V. +1,000 NE +1,000 NE +600 -600 -600 NE +200 -400 +600 +600 +400 +1,000 Match the effect that the transaction below would have on Cathy Company's Income Statement and Balance Sheet. Choose (I), (II), (III), (IV), or (V) from the grid. For example, if the transaction were "Paid $600 due on accounts payable," the correct answer would be (III) because there is no effect on revenue, expense, or net income; a $600 decrease in assets and liabilities; and no effect on equity. Transaction: The Company provided $1,000 of cleaning services to customers - $600 were for customers who immediately paid in cash, and $400 were for customers who were sent bills for the amounts they owe. SOIV The company was started when it received $38,000 cash from the owners who purchased stock. The company purchased equipment on January 1 that cost $20,000 cash. The equipment had a three-year useful life and a $2,000 salvage value. Cathy Company uses straight-line depreciation. Services provided for cash were $14,000. . $3,200 of supplies were purchased on account. Services provided on account were $19,000. On November 1, the company paid cash of $7,200 in advance for six-months' rent, beginning immediately. Cash collections of accounts receivable amounted to $7,000. $1,000 of the accounts payable were paid. . Supplies on hand as of December 31 amounted to $1,200. A $600 cash dividend was declared and paid to the owners. The amount of common stock as of December 31, 2021 was: $40,000 $37,400 $38,000 $18,000 $26,000