Suppose the adjustments required in Exercise 3-8 were not made. Compute the overall overstatement or understatement of each revenue and expense account as well as the effect on net income as a result of the omission of these adjustments.
In Exercise 3-8
a. Amortization, $5,000.
b. Prepaid insurance used $500.
c. Interest expense accrued $400.
d. Employee salaries owed for Monday through Thursday of a five-day workweek; the weekly payroll is $16,000.
e. Unearned service revenue that becomes earned, $2,000.