Chapter 8, Problem 17E

Errors A company that uses the periodic inventory system makes the following errors:

1. 1. It omits a purchase on credit from the purchases account and the ending inventory.
2. 2. It omits a purchase on credit from the purchases account, but the ending inventory is correct.
3. 3. It overstates the ending inventory, but purchases arc correct.

Required:

Indicate the effect of the preceding errors on the income statement and the balance sheet of the current and succeeding years.