Indicate the effects of the following errors on each of the listed in the...
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Accounting
Indicate the effects of the following errors on each of the listed in the column headings Use the following symbols : O = overstated, U understated , and NE = no effectAssume that the company does not use the direct write -off method for uncollectible accounts.
Transaction
Gross
Profit
Current
Ratio
Receivables
Income
Net
Income
Retained
Earnings
Working
Capital
a . Recorded uncollectible accounts expense by debiting Sales and crediting Accounts Receivable.
b. Wrote off an account receivable deemed uncollectible by debiting Uncollectible Accounts Expense and crediting Accounts Receivable .
c. Collected cash from credit customers settlement of outstanding accounts receivable by debiting Cash and credit- ing Sales .
Gross Profit =Sales - Cost of Goods Sold
Current Ratio =Current Assets / Current Liabilities
Receivables Turnover Rate =Sales/ Average Accounts Receivable ( net)
Working Capital = Current Assets - Current Liabilities
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