In early 2012, while reviewing Huffman Inc.'s 2011 financial records, the accountant discovered several errors. For each of the following errors, indicate the effect on net income (i.e., understatement, overstatement, or no effect) for both 2011 and 2012, assuming that no correction had been made and the company uses a periodic system for inventory.
(a) Certain items of ending inventory were accidentally not counted at the end of 2011.
(b) Machinery was sold in May 2011, but the company continued to deduct depreciation for the remainder of 2011, although the asset was removed from the books in May.
(c) The 2011 year-end purchases of inventory were not recorded until the beginning of 2012, although the inventory was correctly counted at the end of 2011.
(d) Goods sold on account in 2011 were not recorded as sales until 2012.
(e) Insurance costs incurred but unpaid in 2011 were not recorded until paid in 2012.
(f) Interest revenue in 2011 was not recorded until 2012.
(g) The 2011 year-end purchases were not recorded until the beginning of 2012. The inventory associated with these purchases was omitted from the ending inventory count in 2011.
(h) A check for January 2012 rent was received and recorded as revenue at the end of 2011.
(i) Interest accrued in 2011 on a note payable was not recorded until it was paid in 2012.