This document lists 9 errors affecting the financial statements of various supermarkets. The errors include unrecorded or incorrectly recorded sales transactions, which impact accounts such as sales, cost of goods sold, gross profit, and receivables. The errors lead to financial statements that are misstated in terms of completeness, classification, occurrence, accuracy, and cut-off.
This document lists 9 errors affecting the financial statements of various supermarkets. The errors include unrecorded or incorrectly recorded sales transactions, which impact accounts such as sales, cost of goods sold, gross profit, and receivables. The errors lead to financial statements that are misstated in terms of completeness, classification, occurrence, accuracy, and cut-off.
This document lists 9 errors affecting the financial statements of various supermarkets. The errors include unrecorded or incorrectly recorded sales transactions, which impact accounts such as sales, cost of goods sold, gross profit, and receivables. The errors lead to financial statements that are misstated in terms of completeness, classification, occurrence, accuracy, and cut-off.
Description of error Account(s) affected Effect on Financial Assertion(s)
Statement Compromised Ex The sales of Red Sales and Accounts Sales, Cost of Goods Completeness 1 Supermarket with sales Receivable upon Sales. Sold, Gross Profit, Net order number XXX was not And Cash and Accounts Income and Accounts recorded in the general Receivable upon Cash Receivable are ledger. Collection understated. Ex The sales of Blue Sales and Office Sales, Gross Profit, and Classification 2 Supermarket on December Supplies Expense Office Supplies expense 5th with sales order number are understated. YYY was recorded in the Office Supplies account by mistake. 1 North The sales of North Sales and Accounts Sales, Cost of Goods Occurrence Supermarket Supermarket on December Receivable Sold, Gross Profit, Net 20 with sales order number Income and Accounts 201512947 that recorded in Receivable are General ledger did not overstated. really exist. 2 East The sales of East Sales and Payroll-Salary Sales, Gross Profit and Classification Supermarket Supermarket with sales and Wages Payroll-Salary and order number 201512917 Wages account are was not recorded in the understated. Sales accounts instead it was recorded in the Payroll- Salary and Wages account by mistake. 3 East The sales of East Sales and Accounts Sales, Cost of Goods Accuracy Supermarket Supermarket with sales Receivable upon Sales Sold, Gross Profit, Net order number 201512917 Income and Accounts with item no. 7009 was Receivable are inputted wrong unit price. understated. 4 East The sales of East Sales and Accounts Sales, Cost of Goods Cut-off Supermarket Supermarket with sales Receivable upon Sales; Sold, Gross Profit, Net order number 201601963 and Cash and Accounts Income and Accounts was erroneously recorded Receivable upon Cash Receivable are at Dec. 2015 general ledger. Collection. overstated. The sales is actually for January 2016. 5 Big The sales of Big Sales and Accounts Sales, Cost of Goods Cut-off Supermarket Supermarket on December Receivable upon Sales Sold, Gross Profit, Net 26 with sales order number Income and Accounts 201601951 was actually Receivable are sales on January 2016 but overstated. recorded in December 2015 general ledger. 6 Near The sales of Near Sales and Accounts Sales, Cost of Goods Completeness Supermarket Supermarket with sales Receivable upon Sales. Sold, Gross Profit, Net order number 201512937 And Cash and Accounts Income and Accounts was not recorded in the Receivable upon Cash Receivable are general ledger. Collection understated. 7 Far The sales of Far Sales and Rent expense Sales, Gross profit, Rent Classification Supermarket Supermarket with sales expense are order number 201512940 understated. was recorded in the Rent Expense account by mistake. 8 Blue The sales of Blue Sales and Accounts Sales, Cost of Goods Occurrence Supermarket Supermarket with sales Receivable Sold, Gross Profit, Net order number 201512950 Income and Accounts did not really exist. Receivable are overstated. 9 Red The sales of Red Sales and Accounts Sales, Cost of Goods Completeness Supermarket Supermarket with sales Receivable upon Sales. Sold, Gross Profit, Net order number 201512949 And Cash and Accounts Income and Accounts was not recorded in the Receivable upon Cash Receivable are general ledger. Collection understated.