Dubb CoReceived Merchandise on Consignment

question 62

Multiple Choice

Dubb Co.received merchandise on consignment.As of March 31, Dubb had recorded the transaction as a purchase and included the goods in inventory.The effect of this on its financial statements for March 31 would be

• A)no effect.
• B)net income was correct and current assets and current liabilities were overstated.
• C)net income, current assets, and current liabilities were overstated.
• D)net income and current liabilities were overstated.

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Definitions:

Disbursements

Payments made by a business, often involving cash outflows for operating expenses, acquisitions, or investments.

Ending Cash Balance

The amount of cash a company has at the end of a given period, reflecting all cash inflows and outflows during that period.

Cash Disbursements

Outflows of cash for various purposes, including operating expenses, asset purchases, and other business activities.

Cash Disbursements

Money that is paid out by a company, often including expenses, dividend payments, and other cash outflows.