During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $208,416 instead of the correct amount of $163,486. The effect on the balance sheet and income statement would be a. assets overstated by $44,930; retained earnings understated by $44,930; and net income statement understated by $44,930 b. assets overstated by $44,930; retained earnings understated by $44,930; and no effect on the income statement c. assets, retained earnings, and net income all overstated by $44,930 d. assets and retained earnings overstated by $44,930; and net income understated by $44,930
During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $208,416 instead of the correct amount of $163,486. The effect on the balance sheet and income statement would be a. assets overstated by $44,930; retained earnings understated by $44,930; and net income statement understated by $44,930 b. assets overstated by $44,930; retained earnings understated by $44,930; and no effect on the income statement c. assets, retained earnings, and net income all overstated by $44,930 d. assets and retained earnings overstated by $44,930; and net income understated by $44,930
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
During the taking of its physical inventory on December 31, 20Y4, Barry's Bike Shop incorrectly counted its inventory as $208,416 instead of the correct amount of $163,486. The effect on the
a. assets overstated by $44,930; retained earnings understated by $44,930; and net income statement understated by $44,930
b. assets overstated by $44,930; retained earnings understated by $44,930; and no effect on the income statement
c. assets, retained earnings, and net income all overstated by $44,930
d. assets and retained earnings overstated by $44,930; and net income understated by $44,930
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