In the following table, indicate the effects of failing to recognize each of the indicated adjustments by writing “O” for overstated and “U” for understated.
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Effect on Balance Sheet Items |
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Effect on |
Stockholders” |
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Failure to Recognize |
Assets |
Liabilities |
Equity |
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1 |
Depreciation on a building |
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2 |
Consumption of supplies on hand |
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3 |
The earning of ticket revenue received in advance |
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4 |
The earning of interest on a bank |
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5 |
Salaries incurred by unpaid |
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