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Recording of next year's purchases as purchases of the current year will O understate net income of next year O overstate net income of the current year overstate retained earnings at the end of the current year O not affect retained earnings at the end of next year

Recording of next year's purchases as purchases of the current year will O understate net income of next year O overstate net income of the current year overstate retained earnings at the end of the current year O not affect retained earnings at the end of next year

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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disregard the answers, i am not sure with that. thank you!

Recording of next year's purchases as purchases of the current year will O understate net income of next year overstate net income of the current year overstate retained earnings at the end of the current year O not affect retained earnings at the end of next year
Transcribed Image Text:Recording of next year's purchases as purchases of the current year will O understate net income of next year overstate net income of the current year overstate retained earnings at the end of the current year O not affect retained earnings at the end of next year
If the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? O Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the error. O Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. Reclassify the item to its proper real account. Restate the statement of financial position of the prior year affected by the error.
Transcribed Image Text:If the statement of financial position error is discovered in a subsequent accounting period, what action is to be done by the entity? O Reclassify the item to its proper real account and restate the statement of financial position of the prior year affected by the error. O Reclassify the item to its proper real account but do not restate the statement of financial position of the prior year affected by the error. Reclassify the item to its proper real account. Restate the statement of financial position of the prior year affected by the error.
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