Question: Indicate the effect - Understate, Overstate, No Effect - that each of the following errors has on 2007 net income and 2008 net income.
a) Wages payable were not recorded at 12/31/07. Explain.
b) Equipment purchased in 2006 was expensed. Explain.
c) Equipment purrchased in 2007 was expensed. Explain
d) 2007 ending inventory was overstated. Explain.
e) Patent amortization was not recorded in 2008. Explain.