An Error in the Physical Count of Goods on Hand

question 202

Short Answer

An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is

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Definitions:

Certificates of Deposit

A financial product typically offered by banks that provides an interest rate premium in exchange for the customer agreeing to leave a lump-sum deposit untouched for a predetermined period.

Drafts

Preliminary versions of documents or plans that are subject to revision or editing before the final version is produced.

Negotiability

The ability of a document or instrument to be legally and freely transferred from one party to another.

Contractual Assignment

The transfer of rights or duties under a contract from one party to another.