If a period-end inventory amount is reported in error, it can cause amisstatement in all of the following except:A. Cost of goods sold.B. Gross profit.C. Net sales.D. Current assets.E. Net income.

The correct answer is:C. Net sales. Explanation:A misstatement in the period-end inventory affects…

Answered: If a period-end inventory amount is…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 13DQ: What does an increase in inventory imply? How would this increase in inventory be reported under the...

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Similar questions

Which of these statements is false? A. If cost of goods sold is incorrect, ending inventory is usually incorrect too. B. C. D.
How long does it take an inventory error affecting ending inventory to correct itself in the financial statements? Explain.
Which of the following would cause periodic ending inventory to be overstated? A. Goods held on consignment are omitted from the physical count. B. Goods purchased and delivered, but not yet paid for, are included in the physical count. C. Purchased goods shipped FOB destination and not yet delivered are included in the physical count. D. None of the above
Which of the following financial statements would be impacted by a current-year ending inventory error, when using a periodic inventory updating system? A. balance sheet B. income statement C. neither statement D. both statements
Identify items missing in determining cost of goods sold For (a) through (e), identify the items designated by X and Y. A. Purchases (X + Y) = Net purchases B. Net purchases + X = Cost of inventory purchased C. Inventory (beginning) + Cost of inventory purchased = X D. Inventory available for sale X = Cost of inventory before estimated returns E. Cost of goods sold before estimated returns X = Cost of goods sold
An overstatement of ending inventory results in: Select one: a. an understatement of COGS and an overstatement of net income. b. an overstatement of COGS and an overstatement of net income. c. an understatement of COGS and an understatement of net income. d. an overstatement of COGS and an understatement of net income.
Which of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.
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 as said to correct themselves. Market usually means replacement cost of inventory when applied in the LMC. Cost of goods available for sale equals the inventory plus cost of sales.
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.
The amount of any write down of inventory to net realizable value and all losses of inventory shall be a. recognized as operating expenseb. recognized as other expensec. Recognized as component of cost of goods soldd. deferred until the related inventory is sold
Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identification
3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e., whether 'understatement or overstatement'. Treat each item independently of the other items and assume a periodic inventory system. Nature of error Effect of error on: Gross profit COGS a. Overstatement of beginning inventory b. Understatement of purchases c. Overstatement of purchase returns d. Understatement of purchase returns e. Overstatement of ending inventory f. Understatement of ending inventory

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If a period-end inventory amount is reported in error, it can cause a misstatement in all of the following except: A. Cost of goods sold. B. Gross profit. C. Net sales. D. Current assets. E. Net income.