Atomic Company Did Not Record a December 2019 Purchase of Inventory

question 122

Multiple Choice

Atomic Company did not record a December 2019 purchase of inventory on credit until January 2020.Assume that the December 31,2019 ending inventory was correctly determined.
-What is the effect of this error on the financial statements for the year ended December 31,2019?

• A)Net income is correct.
• B)Stockholders' equity is understated.
• C)Net income is overstated.
• D)Current assets are understated.

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