Financial Statement Review
Equipment (net of depreciation)
Paid in Capital
Total Stockholder's Equity
Total Liabilities and Stockholder
Cost of Goods Sold
Balance Sheet errors effect the presentation of assets, liabilities, and equity where the Income Statement errors effect the classification of revenues and expenses (Kieso, Weygandt, & Warfield 2008, p 1174). The physical count of inventory shows the asset was overstated by $10,000. The omission of the sales transaction and the check showed the cash to be understated by $5,000 and the retained earnings to be overstated by $5,000. On the Income Statement, the Cost of Goods sold was understated by $410,000,...
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