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Do you agree with the following statements? Express your opinion on each statement.

Do you agree with the following statements? Express your opinion on each statement.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Do you agree with the following statements? Express your opinion on each statement.

 

An inventory error that causes an understatement (or overstatement) for net income in one accounting period, if not corrected, will cause an overstatement (or understatement) in the next. Since an understatement (overstatement) of one period offsets the overstatement (understatement) in the next, such errors are said to correct themselves.

 

 

Market usually means replacement cost of inventory when applied in the LCM.

 

 

Cost of goods available for sale equals ending inventory plus cost of sales.

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