When the records of Hilda Corporation were reviewed at the close of 2023, the following errors were discovered.

Instructions

For each item, indicate by a check mark in the appropriate column whether the error resulted in an overstatement or understatement, or had no effect on net income for the years 2022 and 2023.

Transcribed Image Text:

1. Failure to record amortization of patent in 2023 2. Failure to record the correct amount of ending 2022 inventory (the amount was understated because of a calculation error) 3. Failure to record merchandise purchased in 2022 (it was also omitted from ending inventory in 2022 and remained unsold at the end of 2023) Over- statement 2022 Under- statement No Over- Effect statement 2023 Under- statement No Effect