Bennett Company's Accountant Made the Following Errors Related to Merchandise

question 114

Multiple Choice

Bennett Company's accountant made the following errors related to merchandise inventory in 2016:
1) The beginning inventory for 2016 was overstated by $1,900 due to an error in the physical count.
2) A $1,150 purchase of merchandise on credit was not recorded, but the items were included in the ending inventory.
Assuming a periodic inventory system, Bennett Company's 2016 cost of goods sold will be

• A) understated by $750.
• B) understated by $1,900.
• C) overstated by $750.
• D) overstated by $1,900.

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