During the year 1 year-end physical inventory count at Tequesta Corporation, $40,000 worth of inventory was counted
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Question:
During the year 1 year-end physical inventory count at Tequesta Corporation, $40,000 worth of inventory was counted twice. Assuming that the year 2 year-end inventory was correct, the result of the year 1 error was that
a. Year 1 retained earnings was understated, and year 2 ending inventory was correct.
b. Year 1 cost of goods sold was overstated, and year 2 income was understated.
c. Year 1 income was overstated, and year 2 ending inventory was overstated.
d. Year 1 cost of goods sold was understated, and year 2 retained earnings was correct.
Related Book For
Financial Accounting
ISBN: 978-0078025556
8th edition
Authors: Robert Libby, Patricia Libby, Daniel Short
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