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At December 31, 2012, Stevenson Company overstated ending inventory by $36,000. How does this error affect cost of goods sold and net income for 2012? a. Overstates cost of goods sold and understates net income b. Understates cost of goods sold and overstates net income c. Leaves both cost of goods sold and net income correct because the errors cancel each other d. Overstates both cost of goods sold and net income

At December 31, 2012, Stevenson Company overstated ending inventory by $36,000. How does this error affect cost of goods sold and net income for 2012? a. Overstates cost of goods sold and understates net income b. Understates cost of goods sold and overstates net income c. Leaves both cost of goods sold and net income correct because the errors cancel each other d. Overstates both cost of goods sold and net income

Principles of Accounting Volume 1
Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter10: Inventory
Section: Chapter Questions
Problem 13PA: Company Elmira reported the following cost of goods sold but later realized that an error had been...
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At December 31, 2012, Stevenson Company overstated ending inventory by $36,000. How does this error affect cost of goods sold and net income for 2012? a. Overstates cost of goods sold and understates net income b. Understates cost of goods sold and overstates net income c. Leaves both cost of goods sold and net income correct because the errors cancel each other d. Overstates both cost of goods sold and net income
Transcribed Image Text:At December 31, 2012, Stevenson Company overstated ending inventory by $36,000. How does this error affect cost of goods sold and net income for 2012? a. Overstates cost of goods sold and understates net income b. Understates cost of goods sold and overstates net income c. Leaves both cost of goods sold and net income correct because the errors cancel each other d. Overstates both cost of goods sold and net income
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