Question: For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's cost of goods sold, net income, and

For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's cost of goods sold, net income, and retained earnings. Assume that the error is not discovered until 2019 and that a periodic inventory system is used. Ignore income taxes.

U-understated O-overstated -no effect Cost of Goods Sold Net Income Retained Earnings 1. Overstatement of ending inventory 2. Overstatement of purchases 3. Understatement of beginning inventory 4. Freight-in charges are understated 5. Understatement of ending inventory 6. Understatement of purchases 7. Overstatement of beginning inventory 8. Understatement of purchases plus understatement of ending inventory by the same amount

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