A company using the periodic inventory system correctly recorded a purchase of merchandise, but the merchandise was not included in the physical inventory count at the end of the accounting period. The error caused which of the following?
An understatement of both net income and inventory.
An overstatement of inventory, purchases, and accounts payable.
An understatement of inventory, purchases, and accounts payable.
An overstatement of net income and inventory.
Solution
An understatement of both net income and inventory.
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A company using the periodic inventory system correctly recorded a pur.docx
1. A company using the periodic inventory system correctly recorded a purchase of merchandise,
but the merchandise was not included in the physical inventory count at the end of the
accounting period. The error caused which of the following?
An understatement of both net income and inventory.
An overstatement of inventory, purchases, and accounts payable.
An understatement of inventory, purchases, and accounts payable.
An overstatement of net income and inventory.
An understatement of both net income and inventory.
An overstatement of inventory, purchases, and accounts payable.
An understatement of inventory, purchases, and accounts payable.
An overstatement of net income and inventory.
Solution
An understatement of both net income and inventory.
