Error Corrections

Question 1

What is the effect of cost that were incurred but not related to a job order or work in process NOT completed in Retained earnings? And If it was completed?

Answer 1

No Effect

If completed = COGS is understated which means Retained earnings is overstated.

Question 2

What error would result in an overstatement of current assets and stockholders equity?

Answer 2

Holiday Pay Expense for administrative employees is misclassified as manufacturing overhead.