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During a maternity leave of the full-time bookkeeper, a temporary employee was involved in the following transactions.

1. A payment by cheque for $480 to a repair shop for fixing the truck was debited to the Vehicles account and a credit to Cash. 2. A deposit for a collection on account of $1,000 was debited to Cash and credited to Service Revenue. 3. A cheque for $440 to pay for advertising expense was recorded as a Debit to Rent Expense and a credit to Cash. 4. An invoice to a customer recorded for services rendered in the amount $550 was debited to Service Revenue and credited to Accounts Receivable. 5. A payment of interest on a note payable in the amount of $40 was debited to Notes Payable and credited to Cash. No amount had been accrued for this interest. 6. A payment to a supplier, for an earlier purchase on account of $260, was recorded as a debit to Accounts Payable for $26 and a credit to Cash for $26.

Indicate the impact of each error on the balance sheet and income statement by stating whether assets, liabilities, owners equity, revenues, expenses, and profit are understated, overstated, or if there is no effect.

Balance Sheet Income Statement Assets Liabilities Owner's Equity Revenue Expenses Profit 1 Understated Overstated No Effect Understated Overstated No Effect Understated Overstated No Effect Overstated No Effect Understated Overstated No Effect Understated Understated Overstated No Effect 2 No Effect Overstated Understated Overstated Understated No Effect Overstated No Effect Understated Understated Overstated No Effect Understated Overstated No Effect No Effect Understated Overstated 3 No Effect Overstated Understated Overstated No Effect Understated Understated Overstated No Effect Overstated No Effect Understated No Effect Understated Overstated Understated Overstated No Effect 4 No Effect Understated Overstated Understated No Effect Overstated Understated Overstated No Effect Understated Overstated No Effect Overstated No Effect Understated No Effect Overstated Understated 5 Overstated No Effect Understated Understated No Effect Overstated No Effect Understated Overstated Understated Overstated No Effect Understated No Effect Overstated No Effect Understated Overstated 6 Overstated No Effect Understated No Effect Understated Overstated Understated No Effect Overstated Overstated Understated No Effect Overstated No Effect Understated Understated Overstated No Effect

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