Net income at year end will be understated if Group of answer choices A. Inventory at year end is overstated B. Sales revenue during the year is overstated C. Accrued income is not recognized D. Insurance expense is not recognized
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Net income at year end will be understated if
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- Net income at year end will be overstated if a. Prepaid expense is not recognized b. Accrued income is not recognized c. Inventory at year end is understated d. Purchases during the year are understatedIf ending inventory is overstated in the current fiscal year, what effect will this have on net income for the next fiscal year? a.Net income would be understated. b.Net income would only be affected in the current fiscal year, and it would be understated. c.There would be no effect on net income. d.Net income would be overstated.Several errors are listed below. Indicate the effect each error would have on 2020 net income by selecting a plus sign (+), minus sign (-) or NI (no impact). Part (a) has been completed as an example. Effect on 2020Net Income a. Failed to record a 2020 expense. + b. Ending 2019 inventory is understated. c. Ending 2020 accrued expense is overstated. d. Ending 2020 inventory is overstated. e. Ending 2019 accrued revenue is understated. f. Ending 2020 prepaid expense is overstated. g. Ending 2019 unearned revenue is overstated. h. Ending 2020 accrued revenue was overstated. i. Ending 2019 prepaid expense was overstated. j. Ending 2019 accrued expense is overstated. k. Ending 2020 unearned revenue is understated.
- Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error? Da. Gross profit is understated. Ob. Owner's equity is overstated. Oc. Net income is understated. Od. Cost of merchandise sold is overstated.In 2019, ending inventory is overstated. What is the effect of the error on net income in 2019 and 2020? A. Net income is understated in 2019 and 2020. B. Net income is understated in 2019 and overstated in 2020. C. Net income is overstated in 2019 and understated in 2020. D. Net income is overstated in 2019 and 2020.1. If the inventory account at the end of the year is understated, the effect will be to a.overstate the gross profit on sales. b.understate the net purchases. c. overstate the cost of goods sold. d.overstate the goods available for sale 2. Which one among the following statements is not a characteristic of the integral view of presenting interim financial statements? a.It is the more acceptable view. b.Each interim period is recognized as a separate accounting period, regardless of the length of time involved. c. Each interim period is a part of the annual period. d.The revenues and expenses for the annual period are allocated among interim periods 3. What is correct concerning the 75% overall size test for operating segments? a. The total external and internal revenue of all reportable segments is 75% or more of the entity’s external revenue. b. The total external revenue of all reportable segments is 75% or more of the entity’s external and internal revenue. c. The total external…
- The Effect of Ignoring Adjusting Entries on Net Income For each of the following independent situations, determine whether the effect of ignoring the required adjusting entry will result in an understatement (U), will result in an overstatement (O), or will have no effect (NE) on net income for the period.Inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and stockholders' equity? a.net income is understated, assets are understated, and stockholders' equity is overstated b.net income is understated, assets are understated, and stockholders' equity is understated c.net income is overstated, assets are overstated, and stockholders' equity is overstated d.net income is overstated, assets are overstated, and stockholders' equity is understatedIf the ending inventory is overstated in the current year: Net income will be understated in the current year. Next year's beginning inventory will also be overstated. Next year's net income will be overstated. Next year's beginning inventory will be understated.
- What is the effect of a $51000 overstatement of last year's inventory on current years ending retained earning balance? Overstated by $51000. No effect. Understated by $51000. Need more information to determine.What is the effect on net income if a company failed ro record a purchase in transit (FOB shipping point) and also failed to include the purchase in physical inventory? a. Income is overstated b. Income is understated c. Income is correct d. Not enough information is provided to determine the answerShow how the following independent errors will affect net income on 2020. Choose if its overstated, understated and no effect Ending inventory in 2020 overstated Failed to accrue 2020 interest revenue Failed to count office supplies on hand at 12/31/20. Cash expenditures have been charged to an office supplies expense account during the year 2020 Ending inventory in 2020 understated Overstated 2020 depreciation expense; 2021 expense correct Ending inventory in 2020 overstated Failed to accrue 2020 interest revenue A capital expenditure for factory equipment (useful life, 5 years) was erroneously charged to maintenance expense in 2020 Failed to count office supplies on hand at 12/31/20. Cash expenditures have been charged to an office supplies expense account during the year 2020. Row Failed to accrue 2020 wages Ending inventory in 2020 understated Overstated 2020 depreciation expense; 2021 expense correct