Question: On December 3 0 , Kessler Co . accepted delivery of merchandise which it purchased on account. As of December 3 1 , Kessler had

On December 30, Kessler Co. accepted delivery of merchandise which it

On December

30,

Kessler Co

.

accepted delivery of merchandise which it purchased on account. As of December

31,

Kessler had recorded the purchase, but did not include the merchandise in its physical count of ending inventory. The effect of this on its financial statements for December

31

would be

net income was correct and current assets were understated.

net income was overstated and current assets were understated.

purchased on account. As of December 31, Kessler had recorded the purchase,

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