Question
On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were net 30, FOB shipping point. The
On December 31, 2019, Ana Inc. sold merchandise for P750,000 to Ysa Inc. The terms of the sales were net 30, FOB shipping point.
The merchandise was shipped on December 31, 2019, and arrived at Ysa Inc. on January 5, 2020.
Due to a clerical error, the sale was not recorded until January 2020 and the merchandise sold at a 25% markup on cost was included in inventory on December 31, 2019.
What was the net effect of the errors on retained earnings?
A. No Effect
B. Understated by 150,000
C. Understated by 1,350,000
D. Overstated by 150,000
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There was no effect on retained earnings There was no effect ...
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Intermediate Accounting IFRS
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
3rd edition
1119372933, 978-1119372936
