Question: A company that uses the periodic inventory system makes the following errors: 1. It omits a purchase on credit from the Purchases account and the

A company that uses the periodic inventory system makes the following errors:
1. It omits a purchase on credit from the Purchases account and the ending inventory.
2. It omits a purchase on credit from the Purchases account, but the ending inventory is correct.
3. It overstates the ending inventory, but purchases are correct.

Required
Indicate the effect of the preceding errors on the income statement and the balance sheet of the current and succeeding years.

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1 Current year Income statement Income is correct because the errors in Purchases and Ending Inventory offset each other Balance sheet Ending Inventor... View full answer

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