Lesson: Types of Accounting Errors

In this lesson, Nick Palazzolo, CPA, simplifies the intricate subject of accounting errors for keen minds looking to master their understanding of financial statements. He outlines various types of commonplace errors, from the improper application of GAAP to basic miscalculations, emphasizing the necessity for companies to correct all material errors. Pulling no punches, Nick examines scenarios ranging from incorrect estimations made without due diligence to the misclassification of expenses versus capital costs, stressing the importance of accurately capitalizing and expensing costs. He also clarifies the proper treatment of prior period adjustments, ensuring that the shining armor of accrued revenues and expenses remains untarnished.