For each of the following inventory errors occurring in 2021, determine the effect of the error on 2021's cost of goods sold, net income,and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that the error is not discovered until 2022 andthat a periodic inventory system is used. Ignore income taxes.Cost of GoodsSoldRetainedNet IncomeEarnings1.Overstatement of ending inventoryU2.Overstatement of purchases3.Understatement of beginning inventory4.Freight-in charges are understated5Understatement of ending inventory6.Understatement of purchases7.of beginning inventory8.Understatement of purchases plus understatement of ending inventory by the same amount

The entire amount your organization spent as a cost directly tied to the selling of merchandise is…

For each of the following inventory errors occurring in 2021, determine the effect of the error on 2021's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that the error is not discovered until 2022 and that a periodic inventory system is used. Ignore income taxes. Cost of Goods Retained Net Income Sold Earnings 1. Overstatement of ending inventory U 2. Overstatement of purchases 3. Understatement of beginning inventory 4. Freight-in charges are understated 5. Understatement of ending inventory 6 Understatement of purchases 7. Overstatement of beginning inventory 8. Understatement of purchases plus understatement of ending inventory by the same amount

For each of the following inventory errors occurring in 2021, determine the effect of the error on 2021's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that the error is not discovered until 2022 and that a periodic inventory system is used. Ignore income taxes. Cost of Goods Retained Net Income Sold Earnings 1. Overstatement of ending inventory U 2. Overstatement of purchases 3. Understatement of beginning inventory 4. Freight-in charges are understated 5. Understatement of ending inventory 6 Understatement of purchases 7. Overstatement of beginning inventory 8. Understatement of purchases plus understatement of ending inventory by the same amount

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 12MC: Which of the following financial statements would be impacted by a current-year ending inventory...

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Similar questions

If a group of inventory items costing $3,200 had been double counted during the year-end inventory count, what impact would the error have on the following inventory calculations? Indicate the effect (and amount) as either (a) none, (b) understated $______, or (c) overstated $______. Table 10.2
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