Trent Department Store uses a perpetual  inventory sys- tem but adjusts its inventory records at year-end to reflect the results of a complete physical inventory. In the physi- cal inventory taken at the ends of 2010 and 2011, Trent’s employees failed to count the merchandise in the store’s window displays. The cost of this merchandise amounted to$13,000 at the end of 2010 and $19,000 at the end of 2011. As a result of these errors, the cost of goods sold for 2011 will be:a.       Understated by $19,000.b.       Overstated by $6,000.c.       Understated by $6,000.d.       None of the above.

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Asked Mar 25, 2020
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    Trent Department Store uses a perpetual  inventory sys- tem but adjusts its inventory records at year-end to reflect the results of a complete physical inventory. In the physi- cal inventory taken at the ends of 2010 and 2011, Trent’s employees failed to count the merchandise in the store’s window displays. The cost of this merchandise amounted to

$13,000 at the end of 2010 and $19,000 at the end of 2011. As a result of these errors, the cost of goods sold for 2011 will be:

a.       Understated by $19,000.

b.       Overstated by $6,000.

c.       Understated by $6,000.

d.       None of the above.

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Cost of goods sold: It refers to the sum total of all the cost incurred by the...

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