1. In 2021, Jules Company realized that its ending inventory was understated by P1,500 in 2019. How should Jules Company handle this? a. An adjustment to reduce inventory by P1,500 needs to be made b. An adjustment to increase cost of goods sold by P1,500 needs to be made. c. An adjustment to increase inventory by P1,500 needs to be made d. No adjustment needs to be made.
1. In 2021, Jules Company realized that its ending inventory was understated by P1,500 in 2019. How should Jules Company handle this? a. An adjustment to reduce inventory by P1,500 needs to be made b. An adjustment to increase cost of goods sold by P1,500 needs to be made. c. An adjustment to increase inventory by P1,500 needs to be made d. No adjustment needs to be made.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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1. In 2021, Jules Company realized that its ending inventory was understated by P1,500 in 2019. How should Jules Company handle this?
a. An adjustment to reduce inventory by P1,500 needs to be made
b. An adjustment to increase cost of goods sold by P1,500 needs to be made.
c. An adjustment to increase inventory by P1,500 needs to be made
d. No adjustment needs to be made.
2. For interim reporting, a gain on disposal of land occurring in the third quarter is
a. Recognized and allocated over the quarters
b. Recognized and allocated over four quarters
c. Recognized immediately in the third quarter
d. Deferred until the annual reporting
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