Please study Valix (1) Cash and cash equivalents (2) Bank reconciliation

NOTES COMPRESSION Error correction 1. Over/understatement - must know the differences of effect on: (1) current year net income (2) retained earnings, beginning (3) retained earnings, ending (4) working capital (5) counterbalancing versus non-counterbalancing (when is B/S and I/S of CY and PY incorrect?) ACTION: practice exercise on brown paper, devise easier way to process data 2. Correcting entries (1) study inventory accounting (difference of periodic and perpetual) (2) partner of R/E, beg for correcting prior period errors (3) asset versus expense approach (prepayments) (4) liability versus income approach (accrued income) possible kasi na iba pala ung approach on accounting na ginawa nung company kaya dapat walang effect sa NI ACTION: review STRONGER and MADILIM exercises 3. Income tax table EBIT +/- permanent differences = Accounting income subject to tax (if multiplied with tax rate = IT expense) AIST +/- temporary differences = Taxable income (if multiplied with tax rate = CTE) Temporary differences multiplied by tax rate = DTE 4. Comparative FS when is B/S and I/S of CY and PY incorrect? ACTION: supply table for guidance