Chapter 9, Problem 9.26E

If the beginning inventory for 2025 is overstated, the effects of this error on cost of goods sold for 2025, net income for 2025, and assets at December 31, 2026, respectively, are Ⓒ understatement, overstatement, no effect. O understatement, overstatement, overstatement. Ⓒoverstatement, understatement, no effect. O overstatement, understatement, overstatement.

1. If ending inventory on December 31, 2019, is overstated, then, a) cost of goods sold for the year ended December 31, 2020, will be understated. b) gross profit for the year ended December 31, 2019, will be understated. c) gross profit for the year ended December 31, 2020, will be understated. d) cost of goods sold for the year ended December 31, 2019, will be overstated.

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.

The accountant for Suzanne Company made the following errors related to inventory in 2020: 1. The beginning inventory for 2020 was overstated by $1,375 due to an error in the physical count. 2. A $1,650 purchase of merchandise on credit in 2020 was not recorded or included in the ending inventory. ​ Assuming a periodic inventory system, how would Sue's cost of goods sold, gross profit, and net income be affected in 2020 by these errors?  Set Cost of Goods Sold Gross Profit Net Income I. Overstated Understated Understated II. Overstated Understated No effect III. Understated Overstated Overstated IV. No effect No effect No effect ​   a.  Set I   b.  Set II   c.  Set III   d.  Set IV

Suppose Ajax Corporation overstates its ending inventory amount. What effect will this have on the reported amount of cost of goods sold in the year of the error? a. Overstate cost of goods sold.b. Understate cost of goods sold.c. Have no effect on cost of goods sold.d. Not possible to determine with information given.

Do you agree with the following statements? Express your opinion on each statement.   An inventory error that causes an understatement (or overstatement) for net income in one accounting period, if not corrected, will cause an overstatement (or understatement) in the next. Since an understatement (overstatement) of one period offsets the overstatement (understatement) in the next, such errors are said to correct themselves.     Market usually means replacement cost of inventory when applied in the LCM.     Cost of goods available for sale equals ending inventory plus cost of sales.

Do you agree with the following statements? Express your opinion on each statement. An inventory error that causes an understatement (or overstatement) for net income in one accounting period, if not corrected, will cause an overstatement (or understatement) in the next. Since an understatement (overstatement) of one period offsets the overstatement (understatement) in the next, such errors as said to correct themselves. Market usually means replacement cost of inventory when applied in the LMC. Cost of goods available for sale equals the inventory plus cost of sales.

PLEASE ANSWER ASAP. I WILL DO THUMBS UP. THANK YOU SO MUCH. 1. Inventory at the end of 2021 was overstated. What is its effect net income of year 2022? a. Overstated b. Cannot be determined from the given information c. No Effect d. Understated 2. Uneamed Rent Income was not recognized in year 2021. What is its effect net income of 2021? a. Cannot be determined from the given information b. Overstated c. Understated d. No Effect 3.Which of the following is not an example of error? O a. Incorrect classincation of an expenditure as between expense and asset. b. Recognition of gain on fully depreciated property. c. Failure to recognize accrual and deferral. d. Misstatement of asset, liability or equity 4. Accrued interest income was overlooked in year 2021, what is its effect in Net income of 2023? a. Understated b. No Effect O c. Cannot be determined from the given information d. Overstated 5.Accrued salaries expense is overlooked in year 2021, what is its effect in the net income of…

When a company that uses the periodic inventory system wants to remove beginning estimated returns inventory, which of the following accounts is debited? a.Estimated Returns Inventory b.Cost of Goods Sold c.Customer Refunds Payable d.Income Summary