Before 2020, KnowieNowl Company used the cash basis of accounting. For the year ended December 31, KnowieNowl changed to the accrual basis. KnowieNowl cannot determine the beginning balance of supplies inventory. What effect of KnowieNowl’s inability to determine beginning supplies inventory on its 2020 accrual basis profit and December 31, 2020 accrual basis capital, respectively? a. overstated; overstated b. no effect; no effect c. no effect; overstated d. overstated; no effect
Before 2020, KnowieNowl Company used the cash basis of accounting. For the year ended December 31, KnowieNowl changed to the accrual basis. KnowieNowl cannot determine the beginning balance of supplies inventory. What effect of KnowieNowl’s inability to determine beginning supplies inventory on its 2020 accrual basis profit and December 31, 2020 accrual basis capital, respectively? a. overstated; overstated b. no effect; no effect c. no effect; overstated d. overstated; no effect
Chapter10: Inventory
Section: Chapter Questions
Problem 14EA: If Wakowski Companys ending inventory was actually $86,000 but was adjusted at year end to a balance...
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Before 2020, KnowieNowl Company used the cash basis of accounting. For the year ended December 31, KnowieNowl changed to the accrual basis. KnowieNowl cannot determine the beginning balance of supplies inventory. What effect of KnowieNowl’s inability to determine beginning supplies inventory on its 2020 accrual basis profit and December 31, 2020 accrual basis capital, respectively?
a. overstated; overstated
b. no effect; no effect
c. no effect; overstated
d. overstated; no effect
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