The Accountant for the Bay Company Made an Error, Which

question 167

Essay

The accountant for the Bay Company made an error, which understated the ending inventory for Year 1 by $7,000. Bay Company uses the perpetual inventory system. Assuming that this error is not caught and corrected, indicate the effect of the error on each of the following items. Write U (understated), O (overstated)or N (not affected)next to each item.Year 2 Beginning Inventory: ________Year 2 Purchases: ________Year 1 Goods Available for Sale: ________Year 1 Net Income: ________Year 1 Retained Earnings ending balance: ________Year 1 Total Assets at end of year: ________Year 2 Net Income: ________Year 2 Retained Earnings ending balance: ________Year 1 Cost of Goods Sold: ________Year 1 Gross Margin: ________

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Definitions:

New Middle Class

A socio-economic group that emerged in industrial societies, characterized by higher education levels, professional occupations, and relatively high income.

Physicians

Medical professionals who diagnose, treat, and help prevent diseases and injuries, typically holding a degree in medicine.

Free Black Americans

African Americans who were not enslaved and lived freely in the United States, especially significant before the Civil War in the context of a society divided by slavery.