in its first year of business, Miss Take, the bookkeeper, eroneously recorded a $1,000 period cost as a product cost. Only 3/4 of the inventory has been sold. What effect does this error have on the following? Assets Cost of Goods Sold Gross Profit Operating Income A. Overstated в. Understated

in its first year of business, Miss Take, the bookkeeper, eroneously recorded a $1,000 period cost as a product cost. Only 3/4 of the inventory has been sold. What effect does this error have on the following? Assets Cost of Goods Sold Gross Profit Operating Income A. Overstated в. Understated

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter13: Accounting For Merchandise Inventory

Section: Chapter Questions

Problem 1CE: LO1 If the ending inventory is overstated by 10,000, indicate what, if anything, is incorrect about...

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Question

In its first year of business, Miss Take, the bookkeeper, erroneously recorded a $1,000 period
cost as a product cost. Only 3/4 of the inventory has been sold. What effect does this error
have on the following?
Assets
Cost of Goods Sold
Gross Profit
Operating Income
A.
Overstated
B.
Understated

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