Wells Corporation discovered in 2015 that it had incorrectly recorded $ 50,000 of utilities expense for 2014.

Question:

Wells Corporation discovered in 2015 that it had incorrectly recorded $ 50,000 of utilities expense for 2014. The correct amount of the utilities expense was $ 30,000.

Requirements

1. Determine the effect of the error on the accounting equation in 2014.

2. How should this error be reported in the 2015 financial statements?

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...