In taking a physical inventory at the end of Year 1, Grant Company forgot to count certain units and understated ending inventory by $10,000. Determine how this error effects each of the following. (a) Year 1 cost of goods sold. multiple choice 1 Overstates Year 1 cost of goods sold. Understates Year 1 cost of goods sold. None of the above. (b) Year 1 net income. multiple choice 2 Understates Year 1 net income Overstates Year 1 net income None of the above. (c) Year 2 cost of goods sold. multiple choice 3 Understates Year 2 cost of goods sold. Overstates Year 2 cost of goods sold. None of the above. (d) Year 2 net income. multiple choice 4 Understates Year 2 net income Overstates Year 2 net income None of the above.
In taking a physical inventory at the end of Year 1, Grant Company forgot to count certain units and understated ending inventory by $10,000. Determine how this error effects each of the following. (a) Year 1 cost of goods sold. multiple choice 1 Overstates Year 1 cost of goods sold. Understates Year 1 cost of goods sold. None of the above. (b) Year 1 net income. multiple choice 2 Understates Year 1 net income Overstates Year 1 net income None of the above. (c) Year 2 cost of goods sold. multiple choice 3 Understates Year 2 cost of goods sold. Overstates Year 2 cost of goods sold. None of the above. (d) Year 2 net income. multiple choice 4 Understates Year 2 net income Overstates Year 2 net income None of the above.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
In taking a physical inventory at the end of Year 1, Grant Company forgot to count certain units and understated ending inventory by $10,000. Determine how this error effects each of the following.
(a) Year 1 cost of goods sold.
multiple choice 1
-
Overstates Year 1 cost of goods sold.
-
Understates Year 1 cost of goods sold.
-
None of the above.
(b) Year 1 net income.
multiple choice 2
-
Understates Year 1 net income
-
Overstates Year 1 net income
-
None of the above.
(c) Year 2 cost of goods sold.
multiple choice 3
-
Understates Year 2 cost of goods sold.
-
Overstates Year 2 cost of goods sold.
-
None of the above.
(d) Year 2 net income.
multiple choice 4
-
Understates Year 2 net income
-
Overstates Year 2 net income
-
None of the above.
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