During the taking of the physical inventory, the company inadvertently counted its inventory as $89,000 instead of the correct amount of $87,000. Indicate the effect of the misstatement on the balance sheet of the current year. a.Stockholders' equity is understated by $2,000. b.Stockholders' equity is overstated by $2,000. c.Liabilities are overstated by $2,000. d.Assets are understated by $2,000.
During the taking of the physical inventory, the company inadvertently counted its inventory as $89,000 instead of the correct amount of $87,000. Indicate the effect of the misstatement on the balance sheet of the current year. a.Stockholders' equity is understated by $2,000. b.Stockholders' equity is overstated by $2,000. c.Liabilities are overstated by $2,000. d.Assets are understated by $2,000.
Chapter10: Inventory
Section: Chapter Questions
Problem 13EA: If a group of inventory items costing $15,000 had been omitted from the year-end inventory count,...
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During the taking of the physical inventory, the company inadvertently counted its inventory as $89,000 instead of the correct amount of $87,000. Indicate the effect of the misstatement on the balance sheet of the current year.
a.Stockholders' equity is understated by $2,000.
b.Stockholders' equity is overstated by $2,000.
c.Liabilities are overstated by $2,000.
d.Assets are understated by $2,000.
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