WebThe physical count is used to adjust the Inventory account balance to the actual inventory available. The physical count is used to determine if there has been any theft, loss, damage or errors in inventory. -The physical count is used to adjust the Inventory account balance to the actual inventory available. WebFrom the chart, working capital and the current ratio are understated because part of the ending inventory is missing (not included in the count). Net income is understated because cost of goods sold is overstated. Recall the items that impact cost of goods sold.
Inventories and Cost of Sales Flashcards Chegg.com
WebMar 31, 2024 · Understated inventory balances will inflate the company’s cost of goods sold relative to sales. If the cost of goods sold is overstated, that means that the overall … WebErrors in the valuation of ending merchandise inventory, which is on the balance sheet, produce an equivalent corresponding error in the company’s cost of goods sold for the period, which is on the income statement. When cost of goods sold is overstated, inventory and net income are understated. proxcard clamshell card
Solved Indicate the effect—Understate, Overstate, No - Chegg
WebDec 31, 2024 · Indicate the effect—Understate, Overstate, No Effect—that each of the following errors has on 2024 net income and 2024 net income. 2024 2024 (a) Equipment (with a useful life of 5 years) was purchased and expensed in 2024. Select an option This problem has been solved! WebDec 31, 2024 · Inventory at 12/31/2024 was understated by $6, 300. b. Inventory at 12/31/2024 was overstated by $9, 600. c. On 12/31/2024, inventory was purchased for $3, 300. The company did not record the purchase until the inventory was paid for early in 2024. At that time, the purchase was recorded by a debit to purchases and a credit to cash. WebIn year 1, Claire miscounted ending inventory and understated ending inventory by $10,000. The error was discovered in year 2. Ignoring tax effects, the entry to record this error would include which of the following? (Select all that apply.) Debit inventory $10,000. Credit retained earnings $10,000. restaurants that serve sauerkraut near me