4

4 (points: Indicate in cach of the spaces provided the effect of the described errors on the various elements of a company's financial statements. All sales and purchases are on credit. Assume a periodic inventory system. Use the following codes: 0 = amount is overstated; U=amount is understated; NE = no effect. Net income Sales Cost of goods sold Accounts receivable Accounts payable Inventory Goods sold in transit shipped "fo.b. destination" were recorded as a sale and were included in ending inventory. Goods purchased in transit shipped "f.0.b. destination" by a supplier were recorded as a purchase but were excluded from ending inventory Goods held on consignment from consignor were recorded as a purchase and included in ending inventory count. a 6