If a company uses the periodic inventory system, what is the impact on net income of including goods in transit f.o.b. shipping point in purchases, but not ending inventory?
a. Overstate net income.
b. Understate net income.
c. No effect on net income.
d. Not sufficient information to determine effect on net income.
Answer: b. Understate net income.
Business
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Which of the statements does NOT fit?
A) Standards create a professional environment of "best practice" procedures. B) To create a paperless office, continue to print e -mail messages. C) We use less paper when we use electronic calendars. D) To improve the overall management of paper and electronic records, assess the existing records.
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