How to Account for Accounting Errors Explained

[@shivgupta2232]

What is done retroactively?

[@Tom-nn5wd]

I’m confused as to why a tax liability would be booked if depreciation wasn’t booked.

[@Earths_Accountant]

Thank you 😊

[@AccountingLectures]

You're welcome 😊. Please connect with me: linktr.ee/farhatlectures

[@africasbest1663]

Adam wouldn’t have recorded a deferred Tax liability of 2,000.
Since since he was making an error, he would have recorded an Income tax Expense of 20,000 and an income tax Payable for 20,000.