ACC-1A Lecture Notes - Lecture 12: Convenience Store, Financial Statement, Income Statement
12 views3 pages
Document Summary
Principles of accounting 1: the effect of inventory errors on the financial statements. Errors in the physical inventory count effect a company"s financial statements. You should be able to analyze whether a particular inventory error will overstate or understate financial statement items. If the physical inventory count is understated (less inventory is shown on the balance sheet than is really in inventory for example: the count and thus, the balance sheet indicates say when there really is ). This will understate merchandise inventory on the balance sheet and overstate cost of goods sold on the income statement (since. more appears to be sold, since inventory is reported to be down to ). If the physical inventory count is overstated (more inventory is shown on the balance sheet than is really in inventory for example: the count and thus, the balance sheet indicates say. This will overstate merchandise inventory on the balance.
Get access
Grade+
$40 USD/m
Billed monthly
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
10 Verified Answers
Class+
$30 USD/m
Billed monthly
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
7 Verified Answers