If, at the end of a period, Michaels Company erroneously excluded some goods from its ending inventory and also erroneously did NOT record the purchase of these goods in its accounting records, these errors would cause
a. no effect on the company's net income, working capital, and retained earnings.
b. the company's cost of goods available for sale, cost of goods sold, and net income to be understated.
c. the company's ending inventory, cost of goods available for sale, and retained earnings to be understated.
d. the company's ending inventory, cost of goods sold, and retained earnings to be understated.
A
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Happy Corporation leased a building from Sensor Company. The 10-year lease is recorded as a capital lease. The annual payments are $10,000 and the recorded cost of the asset is $67,100 . The straight-line method is used to calculate depreciation. Which of the following statements is true?
a. Depreciation expense of $6,710 will be recorded each year. b. Depreciation expense of $10,000 will be recorded each year. c. No depreciation expense will be recorded by Happy Corporation. d. No interest expense will be recorded by Happy Corporation.
Halo effects can be positive or negative.
Answer the following statement true (T) or false (F)
When fraud occurs, the most common reaction to those affected by the fraud is:
a. Anger b. Acceptance c. Denial d. Retribution
In the recognition criteria for liabilities with uncertain amount and/or timing, "probable" is used in U.S. GAAP to refer to a threshold of likelihood—a rule of thumb used in practice is approximately _____ In IFRS, "probable" as recognition criterion for liabilities with uncertain amount and/or timing means approximately _____
a. 33%; 25% b. 51%; 51% c. 60%; 25% d. 80%; 51% e. 90%; 75%