Basic Accounting Question?

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Basic Accounting Question?

What is the journal entry to adjust net income for year 2 when depreciation for year 1 was underfunded by $1,000?

2007-11-12 21:06:08 · 1 answers · asked by hahaman 2 in Business & Finance ➔ Taxes ➔ United States

1 answers

1. You don't "fund" depreciation.
2. You don't correct errors in the P&L for year one by adjusting income in year 2. You go back to year one, correct the error, and publish a new set of financials for year 1.

2007-11-12 21:48:09 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 0⤋