An entry to record Purchases and related Accounts Payable of \130,000 for merchandise purchased December 23, 2019, was recorded in January 2020. This merchandise was not included in inventory at December 31, 2019. What effect does this error have on reported net income for 2019? What entry should be made to correct for this error, assuming that the books are not closed for 2019?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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An entry to record Purchases and related Accounts Payable of \130,000 for merchandise purchased on
December 23, 2019, was recorded in January 2020. This merchandise was not included in inventory at
December 31, 2019. What effect does this error have on reported net income for 2019? What entry
should be made to correct for this error, assuming that the books are not closed for 2019?
O a.
Accounts Payable..
130,000
Cash
130,000
Ob.
Accounts Payable...
130,000
Purchases
130,000
О с.
Purchases
130,000
Accounts Payable
130,000
O d. None of these
Transcribed Image Text:An entry to record Purchases and related Accounts Payable of \130,000 for merchandise purchased on December 23, 2019, was recorded in January 2020. This merchandise was not included in inventory at December 31, 2019. What effect does this error have on reported net income for 2019? What entry should be made to correct for this error, assuming that the books are not closed for 2019? O a. Accounts Payable.. 130,000 Cash 130,000 Ob. Accounts Payable... 130,000 Purchases 130,000 О с. Purchases 130,000 Accounts Payable 130,000 O d. None of these
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