A company using a periodic inventory system neglected to record a purchase of merchandise on account at year-end. This merchandise, however, was correctly included in the year-end physical count. How will these errors affect inventory at year- end and cost of goods sold for the year? * O No effect, Understated O No effect, Overstated O Understated, Understated O Understated, No effect
A company using a periodic inventory system neglected to record a purchase of merchandise on account at year-end. This merchandise, however, was correctly included in the year-end physical count. How will these errors affect inventory at year- end and cost of goods sold for the year? * O No effect, Understated O No effect, Overstated O Understated, Understated O Understated, No effect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A company using a periodic
inventory system neglected to
record a purchase of
merchandise on account at
year-end. This merchandise,
however, was correctly
included in the year-end
physical count. How will these
errors affect inventory at year-
end and cost of goods sold for
the year? *
O No effect, Understated
O No effect, Overstated
Understated, Understated
O Understated, No effect
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