An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

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Answer 1

Textbook Question

Chapter 13, Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

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Students have asked these similar questions

If 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.

If 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.

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.

Answer 2

Textbook Question

Chapter 13, Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

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Answer 3

Textbook Question

Chapter 13, Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

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Answer 4

Textbook Question

Chapter 13, Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

Answer 8

Expert Solution & Answer

To determine

Identify whether the given statement is true or false.

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Identify whether the given statement is true or false.

Answer 12

Answer to Problem 1TF

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1 is true.

Answer 13

Explanation of Solution

Inventory error: It is the error to identify a mistake in physical count or in pricing qualities. It is also discovered in same accounting period.

The following table shows the effect of inventory errors:

Serial No	Details	Cost of goods sold	Net income	Retained earnings
1.	Overstatement of ending inventory	Understated	Overstated	Overstated
2.	Overstatement of purchases	Overstated	Understated	Understated
3.	Understatement of beginning inventory	Understated	Overstated	Overstated
4.	Freight-in charges are understated	Understated	Overstated	Overstated
5.	Understatement of ending inventory	Overstated	Understated	Understated
6.	Understatement of purchases	Understated	Overstated	Overstated
7.	Overstatement of beginning inventory	Overstated	Understated	Understated
8.	Understatement of purchases plus understatement of ending inventory by the same amount	No effect	No effect	No effect

Table (1)

Thus, the above table indicates that if ending inventory is overstated in the same year (20-1) then it will cause the net income to be overstated in the same year (20-1).

Answer 14

Ch. 13 - An overstatement of ending inventory in the year...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - LO2 Under the perpetual system of accounting for...Ch. 13 - LO3 A fiscal year that starts and ends at the time...Ch. 13 - LO3 If goods are shipped FOB shipping point, the...Ch. 13 - An understatement of ending inventory in the year...Ch. 13 - Prob. 2MC Ch. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In rimes of rising prices, the inventory cost...Ch. 13 - In the application of lower-of-cost-or-market,...

An overstatement of ending inventory in the year 20-1 will cause net income to be overstated in the year 20-1.

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Answer to Problem 1TF

Explanation of Solution

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