Answered

Welcome to Westonci.ca, your ultimate destination for finding answers to a wide range of questions from experts. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.

If the ending inventory in the previous period was understated $17,000 and the ending inventory in the current period was overstated $27,000. Which of the following is understated in the current period?

a. Owner's equity
b. Cost of goods sold
c. Net income
d. All the other answers are correct

Sagot :

anthougo

Answer:

In the current period,

b. Cost of goods sold

Explanation:

With the current period's beginning inventory (or previous period's ending inventory) understated by $17,000 and the overstatement of the current period's ending inventory by $27,000, it implies that the Cost of goods sold is understated by $10,000.  Once this cost is understated, the net income will be overstated, as well as the owner's equity (via the retained earnings).

Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thanks for using our platform. We aim to provide accurate and up-to-date answers to all your queries. Come back soon. Get the answers you need at Westonci.ca. Stay informed by returning for our latest expert advice.