Question

As I was driving today, I realized that there is a basic conceptual error in assignment Depreciation 1. If you can identify the error, which is really basic, you can earn 0.3 points extra credit. The issue is so basic that it can be described in one word You can earn double extra credit (0.6 points) by identifying a solution to the error. In other words, by adding an additional assumption to the question, the conceptual error goes away Hint: See the story by Chris Isidore (2019) about the Chrysler Building in Manhattan "Iconic Chrysler Building will sell at a huge loss," By Chris Isidore, CNN Business, March 9, 2019

Answer 1

The Conceptual errors are below:

• Error of omission: an accounts payable account is not credited when goods are purchased on credit
• Error of commission: an account receivable is credited to the wrong customer
• Error of original entry: the wrong amount is posted to an account
• Error of accounting principle: an equipment purchase is posted as an operating expense item
• Compensating error: a wrong amount in inventory is balanced by a wrong amount in accounts payable
• Error of entry reversal: cost of goods sold is credited instead of debited and finished inventory is debited instead of credited
• Error of duplication: depreciation expense is debited twice