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...

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

A company that uses the periodic inventory system makes the following errors: 1. It omits a purchase

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 .
2. It omits a purchase on credit from the Purchases account, but the is correct.
3. It overstates the , but purchases are correct.

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

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...