Effects of Errors on Financial Statements
Indicate the Immediate Effect

Effects of errors on financial statements
Indicate the immediate effect of the following errors on each of the accounting elements described in the column headings below, using the following code: O = Overstated; U = Understated; NE = No Effect.
$\begin{array}{lccccc}&\text { Total}&\text { Total }&\text { Profit }&\text { Total }&\text { Total }&\text { Equity }\\\text { Error } & \text { Revenue } & \text { Expense } & & \text { Assets } & \text { Liabilities } \\\text { Example: Received } \$ 500 \text { cash for } & \mathrm{U} & \mathrm{NE} & \mathrm{U} & \mathrm{U} & \mathrm{NE}& \mathrm{U}\\\text {services rendered to a customer, but}\\ \text {recorded the transaction as \( \$ 50 \)}\\\text { (a.) Failed to record depreciation }\\\text { expense for the period.}\\\text { (b.) Recorded payment of an account }\\\text { payable by a credit to cash and debit }\\\text { to an expense account.}\\\text { (c.) Failed to accrue intereset earned}\\\text { on investments during the period.}\\\text { (d.) Recorded the purchase of office }\\\text { equipment on account as a debit to}\\\text { Supplies expense and a credit to }\\\text { Accounts Payable.}\end{array}$