The December 31, 2016, ending inventory failed to include $25,000 of inventory that was received on December 27, 2016. The purchase on account was, however, properly recorded on the date of delivery. What effect will this error have on the December 31, 2016, assets, liabilities, and net income for the year then ended? Assets Liabilities Net Income I. overstated overstated no effect II
understated understated no effect III. understated no effect understated IV. understated understated understated ?
A) I
B) II
C) III
D) IV
C
You might also like to view...
Logistic refers to physical distribution of goods from one location to another
Indicate whether the statement is true or false
The most recent comparative balance sheet of Giacomelli Corporation appears below:Comparative Balance Sheet Ending BalanceBeginning BalanceAssets: Current assets: Cash and cash equivalents$37,000 $29,000 Accounts receivable 20,000 24,000 Inventory 65,000 61,000 Prepaid expenses 5,000 7,000 Total current assets 127,000 121,000 Property, plant, and equipment 424,000 399,000 Less accumulated depreciation 231,000 200,000 Net property, plant, and equipment 193,000 199,000 Total assets$ 320,000 $ 320,000 Liabilities and stockholders' equity: Current liabilities: Accounts payable$19,000 $17,000 Accrued liabilities 58,000 51,000 Income taxes payable 47,000 42,000 Total
current liabilities 124,000 110,000 Bonds payable 77,000 80,000 Total liabilities 201,000 190,000 Stockholders' equity: Common stock 31,000 30,000 Retained earnings 88,000 100,000 Total stockholders' equity 119,000 130,000 Total liabilities and stockholders' equity$ 320,000 $ 320,000 The company uses the indirect method to construct the operating activities section of its statement of cash flows.Which of the following is correct regarding the operating activities section of the statement of cash flows? A. The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income B. The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income C. The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income D. The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income
If the incremental costs of processing further are greater than the incremental revenue, the decision of selling the product at the split-off point is justified
Indicate whether the statement is true or false
Near the end of the model year, the Move-Them-Out automobile dealership had an unusually high inventory level. The manager increased her advertising spending and gave extra incentives to its salespeople. Move-Them-Out operates as if it were in the ________ era.
A. sales-oriented B. retailing-oriented C. value-based marketing D. production-oriented E. market-oriented