Adjusting Entry Mistakes: (Part 2) Overstating and Understating Revenues || Business Debunked
Channel: Business Debunked
Date: 2020-09-22

In Part 2 of our series on adjusting entry mistakes, we talk about what happens when companies overstate or understate their REVENUES. Bad things, apparently! We'll look at examples of how these mistakes impact a company's net income and retained earnings accounts over multiple periods.

This video was produced in partnership with the UBC Sauder School of Business.

🛌 Related Videos 🛌
To review the basics: https://youtu.be/kccA4rRPRrU
To watch Part 1: https://youtu.be/5ZI0NnSHT2E

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0:00 Intro to over and understatement of revenues
0:39 Understating revenues: forgetting to record an accrued revenue
1:37 Understating revenues: forgetting to adjust a deferred revenue
1:54 Understating revenues: long-term impact on financial statements
2:34 Overstating revenues: recording cash as revenue (deferred revenue)
3:34 Overstating revenues: long-term impact on financial statements
4:04 Summary and takeaways

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🛌 Special Thanks To 🛌
Scripting and Filming by Maddie Zapach
Animating and Editing by Arkie Liu
Advising by Dr. Xin Zheng

For more information, please contact businessdebunked@gmail.com

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