A Purchase on Credit Is Recorded Twice and Not Corrected

question 37

Multiple Choice

A purchase on credit is recorded twice and not corrected during the physical inventory.Which of the following statements correctly describes the impact of this error?

• A)The current year income on the income statement is correct because purchases are overstated and ending inventory is overstated.
• B)The current year balance sheet ending inventory and accounts payable are understated.
• C)The succeeding year income on the income statement is incorrect because beginning inventory is understated.
• D)The succeeding year purchases are understated when the prior year purchases are corrected.

---

Definitions:

Bad Moods

Emotional states characterized by feelings of sadness, irritability, or negativity, affecting individual behavior and perception.

Good Moods

A psychological state characterized by feelings of contentment, happiness, or positivity.

Moods Last

A reference to the duration or persistence of emotional states that are less specific and more prolonged than immediate feelings or reactions.

External Information

Data and insights obtained from sources outside an organization, used for decision-making and strategic planning.