18. A company using a periodic inventory system neglected to record a purchase of merchandise on account at year-end. This merchandise was omitted from the year end physical count. How will these errors affect assets, liabilities, and stockholders' equity at year end and profit for the year? Shareholders' Equity Overstate Understate No effect Profit Overstate Assets No effect No effect Understate Liabilities Understate А. В. Overstate Understate No effect Understate С. Understate D. Understate No effect Understate

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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18. A company using a periodic inventory system neglected to record a purchase of
merchandise on account at year-end. This merchandise was omitted from the
year end physical count. How will these errors affect assets, liabilities, and
stockholders' equity at year end and profit for the year?
Assets
No effect
Liabilities
Understate
Shareholders' Equity
Overstate
Profit
Overstate
А.
Understate
No effect
Understate
No effect
Understate
В.
No effect
Overstate
С.
Understate
Understate
D.
Understate
No effect
Understate
Transcribed Image Text:18. A company using a periodic inventory system neglected to record a purchase of merchandise on account at year-end. This merchandise was omitted from the year end physical count. How will these errors affect assets, liabilities, and stockholders' equity at year end and profit for the year? Assets No effect Liabilities Understate Shareholders' Equity Overstate Profit Overstate А. Understate No effect Understate No effect Understate В. No effect Overstate С. Understate Understate D. Understate No effect Understate
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