Under the Periodic Inventory Method, If Merchandise Is Sold for Cash

question 68

Multiple Choice

Under the periodic inventory method, if merchandise is sold for cash on December 31 and is recorded as a sale but is NOT shipped (and thus is included in the ending inventory count) , the financial statements will

• A) Overstate assets
• B) Understate net income
• C) Understate liabilities
• D) Understate assets

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