For each observation, use checkmarks to identify which items on the income statement are overstated or understated. If none of these items is affected by the observation, check the No Effect box.

CH 6 Challenge Questions Calculator For each observation, use checkmarks to identify which ileris on the income statement are overstated or understated. If none of these items is affected by the observation, check the "No Effect box. Sales Overstated Understated Cost of Merchandise Sold Overstated Understated Gross Profit Overstated Understated Operating Expenses Overstated Understated Income from Operations Overstated Understated Observations No Effect Office supplies expense was included in administrative expenses. Sales tax collected on each sale was credited to Cost of Merchandise Sold. While the company accountant was on vacation, the cost of each sale was not recorded for sales c transactions All freight costs were charged to Delivery Expense regardless of the terms of sale. Credit card processing fees were debited to Cost of Merchandise Sold. C Customer returns and allowances were sometimes debited to Estimated Returns Inventory and credited to Sales Inventory shrinkage was credited to Miscellaneous Selling Expense