On December 1,2010,Commonwealth Industries received a $10,000 deposit from a customer for a special order of merchandise to be manufactured and shipped in February,2011.Commonwealth made the following journal entry on December 1,2010: The financial statements dated December 31,2010,would be:
A)correctly stated
B)in error,understating liabilities and overstating assets
C)in error,overstating net income and understating liabilities
D)in error,understating net income and understating stockholders' equity

Question

On December 1,2010,Commonwealth Industries received a $10,000 deposit from a customer for a special order of merchandise to be manufactured and shipped in February,2011.Commonwealth made the following journal entry on December 1,2010:  The financial statements dated December 31,2010,would be:
A)correctly stated 
B)in error,understating liabilities and overstating assets 
C)in error,overstating net income and understating liabilities 
D)in error,understating net income and understating stockholders' equity

Quizplus · Accepted Answer

The Answer of On December 1,2010,Commonwealth Industries received a $10,000 deposit from a customer for a special order of merchandise to be manufactured and shipped in February,2011.Commonwealth made the following journal entry on December 1,2010:  The financial statements dated December 31,2010,would be:
A)correctly stated 
B)in error,understating liabilities and overstating assets 
C)in error,overstating net income and understating liabilities 
D)in error,understating net income and understating stockholders' equity

On December 1,2010,Commonwealth Industries Received a $10,000 Deposit from a Customer