Which of the following errors will normally result in overstatement of 2017 net income? failure to record merchandise purchases in 2016 failure to record accrued salaries expense in 2016 O understatement of 2016 ending merchandise inventory O overstatement of prepaid expense in 2016

Which of the following errors will normally result in overstatement of 2017 net income? failure to record merchandise purchases in 2016 failure to record accrued salaries expense in 2016 O understatement of 2016 ending merchandise inventory O overstatement of prepaid expense in 2016

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: The following information is presented for Bramble Corporation. The net income errors in ending…

A: Inventory management involves keeping track of the goods, components, and raw materials that a…

Q: reason for the FASB changing the accounting method for reporting lower-of-cost-or-market

A: FASB introduced an update in inventory measurement in July 2015. As per this, the inventory should…

Q: To answer the following questions, use the following information. Round to 1 decimal place for…

A: The inventory turnover ratio presents, the level of average inventory kept by a company in…

Q: Langley Company received merchandise on December 31, 2016. Langley failed to record the purchase on…

A: If the purchases entry is not recorded, the expense wouldn't have been recorded and hence the…

Q: A purchase on credit is recorded twice and not corrected during the year-end physical inventory.…

A: When goods are purchased on account i.e. on credit then in that case the purchase account is debited…

Q: The following information is presented for Bramble Corporation. The net income figures were computed…

A: Understatement or overstatement of inventory directly impacts the amount of reported net income for…

Q: A company's unadjusted balance in Inventory will usually not agree with the actual amount of…

A: The amount of goods and materials owned by a company at a particular time, including parts, products…

Q: If merchandise inventory is understated at the end of 2015, and the error is not discovered, how…

Q: Shockley Co. reported the following amounts in its financial statements: (a) Cost of goods sold (b)…

A: Lets understand the basics. When there is inventory overstated or understated then there is impact…

Q: isted below are various types of accounting changes or errors. 6. Change due to understatement of…

A: The prospective effect represents that the changes in the accounting policy would only affect the…

Q: If merchandise inventory is understated at the end of 2017, and the error is not discovered, how…

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Current Attempt in Progress Blossom Company reported cost of goods sold as follows. 2017 2016…

A: Cost of goods sold is the difference between cost of goods available for sale and ending balance of…

Q: Requirements Assume that the ending merchandise inventory was accidentally overstated by $1,800.…

A: Cost of goods sold: Cost of goods sold is defined as the cost incurred by the company in respect of…

Q: A list of errors is shown below: Show the effects of the errors on the indicated balance sheet and…

A: solution The answer is presented in the table below

Q: Accounts receivable (net) Inventory Total assets Current liabilities Long-term debt Net credit sales…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: An entry to record Purchases and related Accounts Payableof $13,000 for merchandise purchased on…

A: The given error is not recording inventory purchases in the period of purchase but in the subsequent…

Q: Provide correct answer

A: Step 1: Introduction to the Inventory TurnoverInventory turnover indicates how often a company's…

Q: Given the following information, answer the questions provided in the space below. Cash Gross…

A: Ratio analysis is a powerful tool used by businesses, investors, and financial analysts to evaluate…

Q: 18. The accountant for the Fred Company did not record a purchase of merchandise on credit or…

A: When purchase has not been included in book of accounts , it means that neither purchases has been…

Question

Which of the following errors will normally result in overstatement of 2017 net income?
O failure to record merchandise purchases in 2016
failure to record accrued salaries expense in 2016
understatement of 2016 ending merchandise inventory
O overstatement of prepaid expense in 2016

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

If beginning inventory is understated by $11800, the effect of this error in the current period is Cost of Goods Sold Net Income Net Income overstated understated understated overstated understated understated overstated overstated
The following information is presented for Marigold Corporation. The net income figures were computed without knowledge of the errors in ending inventory. Assume that there was no error in the 2016 ending inventory. Year Net Incomeper Books Error in EndingInventory 2017 $ 180,000 Overstated $ 23,000 2018 93,000 Overstated 35,000 2019 108,000 No error - 2020 218,000 Understated 6,200 2021 97,000 Understated 19,500 Prepare a worksheet to show the adjusted net income figure for each year from 2017 to 2021 after taking into account the inventory
For each change or error below, indicate how it would be accounted for. 1. Change due to understatement of inventory. options: A.) accounted for prospectively b.) prior period adjustment 2. change from direct write-off to allowance method of accounting for bad debts. Options: a.) accounted for retrospectively b.) prior period adjustment
Ayayai Hardware Limited reported the following amounts for its cost of goods sold and Inventory: Cost of goods sold Ending inventory 2018 Ending inventory $169,200 Cost of goods sold 37,400 2017 Ayayai made two errors: (1) ending inventory for 2018 was overstated by $2,000 and (2) ending inventory for 2017 was understated by $4,100. Assume that neither error has been found or corrected. $152,900 Calculate the correct ending inventory and cost of goods sold amounts for each year. $ 29,400 2018 tA $ LA 2017
Petco Inc. uses the periodic inventory system. Assess the effect on net income of including goods in transit f.o.b shipping point in purchases, but not in ending inventory. a. Overstate net income. b. No effect on net income. O c. Not sufficient information is provided to assess the effect on net income. O d. Understate net income.