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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Definitions:

Bluetooth

A wireless technology standard for exchanging data over short distances between fixed and mobile devices.

IrDA

Short for Infrared Data Association, a group that created standards for transmitting data via infrared light waves, enabling wireless communication between devices.

Wireless Network Key

A password or security code used to authenticate and grant access to a wireless network, protecting it from unauthorized use.

Encrypted Wireless Network

An encrypted wireless network uses cryptographic methods to secure data transmitted over wireless connections, protecting it from unauthorized access.