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If a company uses the periodic inventory system, what is the impact on net income of excluding goods in transit that were recently purchased f.o.b.

If a company uses the periodic inventory system, what is the impact on net income of excluding goods in transit that were recently purchased f.o.b. shipping point from the ending inventory?

Group of answer choices

No effect on net income.

Overstate net income.

Understate net income.

Not sufficient information to determine effect on net income.

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