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? The succeeding year income on the income statement is incorrect because beginning inventory is understated. The succeeding year purchases are understated when the prior year purchases are corrected. The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated. The current year balance sheet ending inventory and accounts payable are understated.
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? The succeeding year income on the income statement is incorrect because beginning inventory is understated. The succeeding year purchases are understated when the prior year purchases are corrected. The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated. The current year balance sheet ending inventory and accounts payable are understated.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter8: Inventories: Special Valuation Issues
Section: Chapter Questions
Problem 17E: Errors A company that uses the periodic inventory system makes the following errors: 1. It omits a...
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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?
The succeeding year income on the income statement is incorrect because beginning inventory is understated.
The succeeding year purchases are understated when the prior year purchases are corrected.
The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated.
The current year balance sheet ending inventory and accounts payable are understated.
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