Suppose a business commits accounting fraud by deliberately not writing down its inventory of $268,000, which is the cost of certain products that it can no longer sell and will be thrown in the junk heap. How should its balance sheet be adjusted to correct for this accounting fraud, ignoring income tax effects?
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Cash |
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Accounts Payable |
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Accounts Receivable |
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Notes Payable |
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Inventory |
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Owners’ Equity |
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Fixed Assets (Net of Accumulated Depreciation) |
_____ |
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_____ |
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Total Assets |
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Total Liabilities and Owners’ Equity |
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