Error Correction

[nathaskie_12]

guys, patulong naman po sa error correction and related topics nahihirapan po kasi akong umitindi.. dami na akong nbasang books, nahihirapan pa rin ako..

[secrecy]

guys, patulong naman po sa error correction and related topics nahihirapan po kasi akong umitindi.. dami na akong nbasang books, nahihirapan pa rin ako..

pag ang error nangyari the prior years, it will be charged against the retained earnings balance. if the current year, sa net income.
you have to determine also the type of error. me typo error, joke!!hehe...counterbalancing and noncounterbalancing error errors.
counterbalancing errors-errors na mag auto correct the next accounting period.(example is inventory)
non-counterbalancing error- errors na hindi mag auto correct the next accounting period.(e.g.,depreciation)
to correct errors:
1. determine mo *** entry made by the company.
example: on january 1,2012, abc company bought machinery for P500,000 cash.
the company made the following entry at the date of acquisition:
DR: Repairs and Maintenance Expense
CR: CAsh

2. determine the correct entry:
DR: Machinery
CR: Cash

3. Determine the correcting entry
if the books were not yet closed,
DR: Machinery
CR: R and M Expense

If the books were closed already
DR: machinery
CR: retained earnings
y r/e? nung sinara mo *** books, nabawasan ang income ng company by 500,000 by debiting to an expense account. so ibalik mo *** 500,000 para tumama *** net income mo. no need to adjust the cash account kasi initially, tama *** pag CR. mo.

another:
abc had the following net income figures w/o knowledge of inventory errors:
year=======reported net income======error in ending inventory
2007------------500,000-----------------overstated 50,000
2008------------520,000-----------------over 90,000
2009------------540,000-----------------under 110,000
2010------------560,000-----------------no error
2011------------580,000-----------------under 20,000
2012------------600,000-----------------over 100,000

compute the corrected net income
solution:
-------------07-----08---- 09---- 10-----11---- 12
ni per book--500---520----540----560----580----600
2007-over---(50)---50
2008-over---------(90)----90
2009-under---------------110---(110)
2011-under-------------------------------20----(20)
2012-over--------------------------------------(100)
total--------450---480---740----450----600----480

*** na bahala sa naalysis basta ito remember mo:
pag overstated ang inventory, kulang ang cost of good sold, mataas ang net income kaya ibawas mo
pag understated ang inventory, mataas ang cgs, mababa ang net income mo so idagdag mo...
as we all know and end ay ang beginning ng next period,pag me error ang ending affected beg.inventory.
gamitin mo lang questioning mind mo if anu nangyayari sa mga transactions.over ba?under ba?anu effect?etc...
me mga prepaid expenses errors din and some adjusting entries....

un lang..sana makatulong...

[secrecy]

pag ang error nangyari the prior years, it will be charged against the retained earnings balance. if the current year, sa net income.
you have to determine also the type of error. me typo error, joke!!hehe...counterbalancing and noncounterbalancing error errors.
counterbalancing errors-errors na mag auto correct the next accounting period.(example is inventory)
non-counterbalancing error- errors na hindi mag auto correct the next accounting period.(e.g.,depreciation)
to correct errors:
1. determine mo *** entry made by the company.
example: on january 1,2012, abc company bought machinery for P500,000 cash.
the company made the following entry at the date of acquisition:
DR: Repairs and Maintenance Expense
CR: CAsh

2. determine the correct entry:
DR: Machinery
CR: Cash

3. Determine the correcting entry
if the books were not yet closed,
DR: Machinery
CR: R and M Expense

If the books were closed already
DR: machinery
CR: retained earnings
y r/e? nung sinara mo *** books, nabawasan ang income ng company by 500,000 by debiting to an expense account. so ibalik mo *** 500,000 para tumama *** net income mo. no need to adjust the cash account kasi initially, tama *** pag CR. mo.

another:
abc had the following net income figures w/o knowledge of inventory errors:
year=======reported net income======error in ending inventory
2007------------500,000-----------------overstated 50,000
2008------------520,000-----------------over 90,000
2009------------540,000-----------------under 110,000
2010------------560,000-----------------no error
2011------------580,000-----------------under 20,000
2012------------600,000-----------------over 100,000

compute the corrected net income
solution:
-------------07-----08---- 09---- 10-----11---- 12
ni per book--500---520----540----560----580----600
2007-over---(50)---50
2008-over---------(90)----90
2009-under---------------110---(110)
2011-under-------------------------------20----(20)
2012-over--------------------------------------(100)
total--------450---480---740----450----600----480

*** na bahala sa naalysis basta ito remember mo:
pag overstated ang inventory, kulang ang cost of good sold, mataas ang net income kaya ibawas mo
pag understated ang inventory, mataas ang cgs, mababa ang net income mo so idagdag mo...
as we all know and end ay ang beginning ng next period,pag me error ang ending affected beg.inventory.
gamitin mo lang questioning mind mo if anu nangyayari sa mga transactions.over ba?under ba?anu effect?etc...
me mga prepaid expenses errors din and some adjusting entries....

un lang..sana makatulong...

pag me correction, pakitama nalang.....hehe

[nathaskie_12]

laking tulong ito, kinopya ko nga.salamat ng marami.