3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e., whether 'understatement or overstatement'. Tre each item independently of the other items and assume a periodic inventory system. Nature of error Effect of error on: Gross profit COGS a. Overstatement of beginning inventory b. Understatement of purchases c. Overstatement of purchase returns d. Understatement of purchase returns e. Overstatement of ending inventory f. Understatement of ending inventory

3. Indicate the effect of the following errors on gross profit and cost of goods sold (COGS), i.e., whether 'understatement or overstatement'. Tre each item independently of the other items and assume a periodic inventory system. Nature of error Effect of error on: Gross profit COGS a. Overstatement of beginning inventory b. Understatement of purchases c. Overstatement of purchase returns d. Understatement of purchase returns e. Overstatement of ending inventory f. Understatement of ending inventory

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter10: Inventory

Section: Chapter Questions

Problem 9MC: Which of these statements is false? A. If cost of goods sold is incorrect, ending inventory is...

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Similar questions

An overstatement of ending inventory results in: Select one: a. an understatement of COGS and an overstatement of net income. b. an overstatement of COGS and an overstatement of net income. c. an understatement of COGS and an understatement of net income. d. an overstatement of COGS and an understatement of net income.
Which of the following is not affected by an error related to ending inventory? Multiple Choice O O O O O Sales. Net income. Current assets. Gross profit. Cost of goods sold.
In a cost-divided income statement, changes in purchased goods (merchandise) must be reported under the item Change in inventory, etc. choose an alternative True False
T, F. Under the GAAP rule, inventories can be reported at above cost in the balance sheet. T, F. If ending inventory is overstated due to quantity or cost errors, but purchases are corrected, the effect in income statement is overstatement because of the cost of goods sold that is understated.
Which of the following, if compared to the other methods for valuing inventory, has a material difference? A. LIFO B: FIFO C: Weighted Average D: Specific Identification.
H6. Lower of cost or market is an attribute used for the: a. initial measurement of accounts receivable b. subsequent measurement of inventory c. subsequent measurement of accounts receivable d. initial measurement of inventory Explain All wrong options and explain with full details
Which of the following is accounted for prospectively? Change in reporting entity. Change in the percentage used to determine warranty expense. Correction of an error. Changes from the weighted-average method of inventory costing to FIFO.
If beginning inventory is understated, then: a. goods available for sale will be overstated. b. gross profit will be overstated. c. net income will be understated. d. stockholders' equity will be correct because the error will have been reversed.
Under IFRS, which of the following methods is not acceptable for the valuation of inventory? a. LIFO. b. FIFO. c. Average cost. d. Specific identification
In accounting for by-products, when the by-products are sold for more than the estimated sales value, the difference is: a. credited to Gain or Loss on Sale of By-Product b. debited to Gain or Loss on Sale of By-Product c. immaterial, so not recorded. d. credited to By-Product Inventory.
0. The inventory evaluation method which does not represent the actual ending inventory value is? a. standard cost b. first-in, first-out (FIFO) c. weighted average d. last-in, first-out (LIFO)
Ending inventory is added to Total Goods Available for Sale when computing for Cost of Goods Sold. True False