hard · Financial Accounting accounting-cycle-financial-statements

Before this misextension is detected, what will the bookkeeper observe when totaling the worksheet columns, and what is the consequence?

1. The Income Statement columns balance and the Balance Sheet columns balance, but net income is overstated by $15,000
2. Both the Income Statement and Balance Sheet column pairs are out of balance by $15,000 each, but the two imbalances are equal and offsetting so net income is correct
3. Both column pairs are out of balance by $15,000 each, and computed net income (the balancing figure) is understated by $15,000 relative to the true amount
4. All four columns still foot correctly because a debit was extended to a debit column, so the error is undetectable on the worksheet

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