The Accountant for Lee Company Made the Following Errors Related

question 45

Multiple Choice

The accountant for Lee Company made the following errors related to merchandise inventory in 2016:
1) The beginning inventory for 2016 was overstated by $750 due to an error in the physical count.
2) A $1,300 purchase of merchandise on credit was not recorded and was not included in the ending inventory.
Assuming a periodic inventory system, Lee Company's 2016 cost of goods sold will be

• A) understated by $550.
• B) understated by $2,050.
• C) overstated by $2,050.
• D) overstated by $750.

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