A Company Using the Periodic Inventory System Correctly Recorded a Purchase

question 16

Multiple Choice

A company using the periodic inventory system correctly recorded a purchase of merchandise,but the merchandise was not included in the physical inventory count at the end of the accounting period.The error caused which of the following?

• A)An understatement of both net income and inventory.
• B)An overstatement of inventory,purchases,and accounts payable.
• C)An understatement of inventory,purchases,and accounts payable.
• D)An overstatement of net income and inventory.

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Definitions:

Freedoms

The rights and privileges that allow individuals to act without restriction or interference from others or the state.

Limitations

Restrictions or caps, such as the time limits within which legal proceedings must be initiated.

Human Rights Legislation

Laws designed to protect individuals' fundamental rights and freedoms from infringement, often by the state or other individuals.

Businesspeople

Individuals who are involved in activities of commerce or trade, often owning or managing businesses.