Select from the option list provided whether each account is understated, overstated, or not affected at...

Transcribed Image Text:

Select from the option list provided whether each account is understated, overstated, or not affected at year end for the audit in each of the cases below (before any audit adjustments have been made). Each choice may be used once, more than once, or not at all. For questions 1 through 6, the company uses a periodic inventory accounting system. The analysis of the data collected from the observation of the inventory physical count indicates that some of the company's inventories were double counted. Account 1. Cash 2. Inventory 3. Cost of goods sold Effect No effect Overstated Understated 4. Liabilities Understated 5. Sales and marketing expense Understated 6. Net income Overstated Select from the option list provided whether each account is understated, overstated, or not affected at year end for the audit in each of the cases below (before any audit adjustments have been made). Each choice may be used once, more than once, or not at all. For questions 1 through 6, the company uses a periodic inventory accounting system. The analysis of the data collected from the observation of the inventory physical count indicates that some of the company's inventories were double counted. Account 1. Cash 2. Inventory 3. Cost of goods sold Effect No effect Overstated Understated 4. Liabilities Understated 5. Sales and marketing expense Understated 6. Net income Overstated