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متابعة

If certain goods owned by an entity were not recorded as a purchase and were not counted in ending inventory, in error, then

A. Cost of goods sold for the period will be understated.

B. Cost of goods sold for the period will be overstated.

C. Net income for the period will be understated.

D. There will be no effect on cost of goods sold or profit for the period.

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تاريخ النشر: 2015/02/13
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
من قبل VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

D. There will be no effect on cost of goods sold or profit for the period.

Lesley Lanag CMA CPA
من قبل Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

D.  No effect (offsetting effect) to cost of sales, hence no effect to net income. 

Cynthia Fombo  ACCA
من قبل Cynthia Fombo ACCA , Senior Accountant , British Integrated Group of Co

If goods owned by an entity were not recorded as a purchase and were not counted in ending inventory in error, it means the inventory was not sold and so does not affect the cost of goods sold account and profits as well.

The correct answer is ‘ D ’

Sunil Maurya
من قبل Sunil Maurya

A is answer because given error affect closing stock which will be higher and higher closing stock makes cost of goods sold understate

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