Question

If, at the end of 2016, a company erroneously excluded some goods in transit from its ending inventory and also erroneously did not record the purchase of these goods in its accounting records, these errors would cause a. the ending inventory and retained earnings to be understated. b. the ending inventory, cost of goods sold, and retained earnings to be understated. c. no effect on net income or retained earnings. d. cost of goods sold and net income to be understated.

Name: if at the end of 2016 a company erroneously excluded some goods in transit from its ending inventory and also erroneously did not record the purchase of these goods in its accounting records 66665
Uploaded: 2023-08-23T21:39:15-08:00
Duration: 1 min 28 s
Channel: James Kiss
Description: if at the end of 2016 a company erroneously excluded some goods in transit from its ending inventory and also erroneously did not record the purchase of these goods in its accounting records 66665

          If, at the end of 2016, a company erroneously excluded some goods in transit from its ending inventory and also erroneously did not record the purchase of these goods in its accounting records, these errors would cause a. the ending inventory and retained earnings to be understated. b. the ending inventory, cost of goods sold, and retained earnings to be understated. c. no effect on net income or retained earnings. d. cost of goods sold and net income to be understated.

Added by David J.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert James Kiss

08/23/2023

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The goods in transit were not included in the ending inventory. This means that the ending inventory is understated. Show more…

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If, at the end of 2016, a company erroneously excluded some goods in transit from its ending inventory and also erroneously did not record the purchase of these goods in its accounting records, these errors would cause a. the ending inventory and retained earnings to be understated. b. the ending inventory, cost of goods sold, and retained earnings to be understated. c. no effect on net income or retained earnings. d. cost of goods sold and net income to be understated.