Solution-Discuss the appropriateness of the journal entries

Discuss the appropriateness of the journal entries

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Question - Because the general level of prices increased during the current year, Gravenhurst Inc. determined that there was a $15,000 understatement of depreciation expense on its equipment and decided to record it in its accounts. The following entry was made:

Depreciation Expense 15,000

Accumulated Depreciation-Equipment 15,000

Instructions - In each of the above situations, discuss the appropriateness of the journal entries in terms of generally accepted accounting principles. For the purposes of your discussion, assume that the financial statements, particularly net income, will be used by the court in a divorce settlement for the company president's spouse.

Reference no: EM132079862

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Discuss the appropriateness of the journal entries

Reference no: EM132079862

Reference no: EM132079862

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