Atomic Company Did Not Record a December 2019 Purchase of Inventory

question 18

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 31,2020?

• A)Net income is correct.
• B)Stockholders' equity is correct.
• C)Net income is overstated.
• D)Stockholders' equity is overstated.

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Definitions:

T-Test

A statistical test used to compare the mean values of two groups, which might come from independent samples or from matched pairs of samples.

Degrees Of Freedom

The number of independent values within a statistical calculation that are free to vary without violating any constraints.

T-Test

A T-test is a statistical test used to compare the means of two groups to see if they are significantly different from each other, commonly used when data follows a normal distribution.

Matched Pairs Experiment

An experimental design in which the participants are paired up according to a specific criterion, ensuring that each pair is as similar as possible, and then different treatments are applied to the members of each pair.