Asked by Kåmøgelø Mokwå on Jun 28, 2024
Verified
A company uses the periodic inventory method and the beginning inventory is overstated by $9000 because the ending inventory in the previous period was overstated by $9000. The amounts reflected in the current end of the period balance sheet are Assets Owner’s Equity \begin{array}{cc}&&\text { Assets } && \text { Owner's Equity } \\\end{array} Assets Owner’s Equity
A) Overstated Overstated \begin{array}{cc} \text { Overstated } && \text { Overstated } \\\end{array} Overstated Overstated
B) Correct Correct \begin{array}{cc}\text { Correct } &&&&\text { Correct } \end{array} Correct Correct
C) Understated Understated \begin{array}{cc}\text { Understated }&&\text { Understated } \end{array} Understated Understated
D) Overstated Overstated \begin{array}{cc} \text { Overstated } &&\text { Overstated } \end{array} Overstated Overstated
Periodic Inventory Method
An accounting method where inventory value and cost of goods sold are determined at the end of an accounting period.
Beginning Inventory
The price of items up for sale at the onset of a fiscal period.
Owner's Equity
The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of shareholders in a company.
- Comprehend the influence of inaccuracies in inventory on financial reports.
Verified Answer
CB
Learning Objectives
- Comprehend the influence of inaccuracies in inventory on financial reports.