How would the following errors affect the account balances and the basic accounting equation, Assets = Liabilities + Owners' Equity?
How do the misstatements affect income?
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Assets |
Liabilities |
Owners' Equity |
Income |
| a. The purchase of a truck is recorded as an expense instead of an asset. |
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| b. A cash payment on accounts receivable is received but not recorded. |
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| c. Fictitious sales on account are recorded. |
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| d. A clerk misreads a handwritten invoice for repairs and records it as $1,500 instead of $1,800. |
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| e. Payment is received on December 31 for the next three months' rent and is recorded as revenue. |