If you found that two $400 hd televisions were missing, explain which financial statements you would correct and how. be specific as to accounts and amounts.

Question: If you found that two $400 hd televisions were missing, explain which financial statements you would correct and how. be specific as to accounts and amounts.

If two $400 HD televisions were found to be missing, the correction would primarily involve the inventory accounts in the financial statements. The specific financial statements that would require correction would depend on the accounting method used by the company, but typically include the following:

1. Income Statement: The income statement reports the company's revenues, expenses, and net income over a specific period. The correction would involve adjusting the cost of goods sold (COGS) or operating expenses, depending on where the missing televisions were initially accounted for.

- If the televisions were included in inventory but not sold, the COGS would be reduced by $800 ($400 per television) to reflect the decrease in inventory.

- If the televisions were expensed as operating expenses, the appropriate expense account (e.g., Supplies or Miscellaneous Expenses) would need to be adjusted by $800.

2. Balance Sheet: The balance sheet presents the financial position of the company at a specific point in time. The correction would affect the inventory account on the asset side of the balance sheet.

- The inventory account would be reduced by $800 to reflect the decrease in the value of the missing televisions.

- Depending on the accounting method used (e.g., periodic or perpetual inventory system), the adjustment may also affect the Cost of Goods Sold account if the missing televisions were previously included in COGS.

It's important to note that the specific accounts and amounts may vary depending on the company's accounting practices and the circumstances surrounding the missing televisions. It is recommended to consult with the company's accountants or financial professionals to accurately determine the necessary corrections in the financial statements.