Question
The accountant for the Fred Company did not record a purchase of merchandise on credit or include the items in the ending inventory. The effect
The accountant for the Fred Company did not record a purchase of merchandise on credit or include the items in the ending inventory. The effect of these omissions on assets, liabilities, and retained earnings would be (assume a periodic inventory system):
| Assets | Liabilities | Retained Earnings |
| a. | Understate Understate Understate |
| b. | Understate Understate No effect |
| c. | No effect Understate No effect |
| d. | Understate No effect Understate |
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Solution Option b is correct ie assets and liabilities wer...
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Accounting Principles
Authors: Paul D Kimmel, Donald E Kieso Jerry J Weygandt
IFRS global edition
1-119-41959-4, 470534796, 9780470534793, 9781119419594 , 978-1119419617
