Indicate the effect of each of the following errors on a companys balance sheet and income statement of the current and succeeding years a The ending inventory is overstated b Merchandise received was not recorded in the Purchases account until the succeeding year although the item was included in ...

O Overstated U Understated CY Current Year SY Succeeding Year a b c d CY SY CY SY CY ...

Indicate the effect of each of the following errors on a companys balance sheet and income statement

Question:

Indicate the effect of each of the following errors on a company’s and income statement of the current and succeeding years:
a. The is overstated.
b. Merchandise received was not recorded in the Purchases account until the succeeding year although the item was included in inventory of the current year.
c. Merchandise purchases shipped FOB shipping point were not recorded in either the Purchases account or the .
d. The was understated as a result of the exclusion of goods sent out on consignment.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...