An entry to record Purchases and related Accounts Payable of $13,000 for merchandise purchased on December 23,

Question:

An entry to record Purchases and related Accounts Payable of $13,000 for merchandise purchased on December 23, 2011, was recorded in January 2012. This merchandise was not included in inventory at December 31, 2011. What effect does this error have on reported net income for 2011? What entry should be made to correct for this error, assuming that the books are not closed for 2011?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...