15 Feb You work in a company that has begun selling pre-orders for its new online magazine annual subscription. In November 2021, the company sold the first pre-order subscriptions, recei
You work in a company that has begun selling pre-orders for its new online magazine annual subscription. In November 2021, the company sold the first pre-order subscriptions, receiving $600,000, which represents one-fifth of its revenues from all sources for the year. The entire amount was collected in cash. The 12-month subscriptions will be distributed monthly starting in December 2021. As the end of the year approaches, you notice that the company had recorded the following journal entry:
Date
Account
Debit
Credit
Nov 2021
Cash
600,000
Subscription Revenue
600,000
There is no plan to make an adjusting entry at year-end. You quickly realize that something is wrong!
Task:
Draft a memo to your supervisor that answers the following questions:
What is the accounting error that was made? What accounting principle(s) have been violated?
If left uncorrected, what are the effects that this error will have on the financial statements dated December 31, 2021? (Be specific!)
If left uncorrected, what are some other problems that might occur?
The importance of fixing the error and what needs to be done to fix the error (include your recommended journal entry or entries)
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.