The accountant for the Daneen Company made the following errors related to purchases of merchandise and ending inventory in 2016: 1. A $3,100 purchase of merchandise on credit early in 2015 was recorded and included in ending inventory at December 31, 2016. 2. A $2,750 purchase of merchandise on credit in 2014 was recorded, but it was not included in the end-of-year physical inventory count. ?
Assuming a periodic inventory system, Daneen Company's 2016 net income will be
A) understated by $350.
B) understated by $5,850.
C) overstated by $5,850.
D) overstated by $350.
D
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