A purchase on credit is recorded twice and not corrected during the year-end physical inventory. Which of the following statements correctly describes the impact of this error?
A) The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated.
B) The current year balance sheet ending inventory and accounts payable are understated.
C) The succeeding year income on the income statement is incorrect because beginning inventory is understated.
D) The succeeding year purchases are understated when the prior year purchases are corrected.
A
Business
You might also like to view...
When reconciling net income to net cash provided by operating activities, a(n) ________ is an addition to net income
A) increase in inventories B) increase in accounts receivable C) increase in wages payable D) decrease in taxes payable
Business
Write the whole number in numerical form: Seven hundred fourteen thousand, four
Business