During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $214,605 instead of the correct amount of $168,444. The effect on the balance sheet and income statement would be a. assets overstated by $46,161; retained earnings understated by $46,161; and net income statement understated by $46,161 b. assets overstated by \$ 46.161 : retained earnings understated by $46,161; and no effect on the income statement c. assets, retained earnings, and net income all overstated by \$ 46.161 d. assets and retained earnings overstated by $46,161; and net income understated by $46,161
During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $214,605 instead of the correct amount of $168,444. The effect on the balance sheet and income statement would be a. assets overstated by $46,161; retained earnings understated by $46,161; and net income statement understated by $46,161 b. assets overstated by \$ 46.161 : retained earnings understated by $46,161; and no effect on the income statement c. assets, retained earnings, and net income all overstated by \$ 46.161 d. assets and retained earnings overstated by $46,161; and net income understated by $46,161
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $214,605 instead of the correct amount of $168,444. The effect on the
a. assets overstated by $46,161;
b. assets overstated by \$ 46.161 : retained earnings understated by $46,161; and no effect on the income statement
c. assets, retained earnings, and net income all overstated by \$ 46.161
d. assets and retained earnings overstated by $46,161; and net income understated by $46,161
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