The Accountant for the Daneen Company Made the Following Errors

question 87

Multiple Choice

The accountant for the Daneen Company made the following errors related to purchases of merchandise and ending inventory in 2016:
1) A $3,100 purchase of merchandise on credit early in 2015 was recorded and included in ending inventory at December 31, 2016.
2) A $2,750 purchase of merchandise on credit in 2014 was recorded, but it was not included in the end-of-year physical inventory count.
Assuming a periodic inventory system, Daneen Company's 2016 net income will be

• A) understated by $350.
• B) understated by $5,850.
• C) overstated by $5,850.
• D) overstated by $350.

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Definitions:

Private Property

Land or belongings owned by individuals or companies, not by the government or the public.

Bad Brakes

Refers to malfunctioning or inadequately performing braking systems in vehicles, which can lead to increased risk of accidents.

Liable

Legally responsible or accountable for actions or outcomes, often necessitating compensation for damages or loss caused.

Defect

A flaw or imperfection in a product or document that makes it inadequate or puts it out of compliance with standards or expectations.