Assume That a $400 Purchase Invoice Received Close to Year-End

question 33

Multiple Choice

Assume that a $400 purchase invoice received close to year-end is not recorded in fiscal 2016,but the inventory is appropriately included in the ending inventory count.What impact will this have on fiscal 2017 financial reporting?

• A)Cost of sales is overstated by $400.
• B)Gross margin is overstated.
• C)Cost of goods available for sale is understated.
• D)There is no effect on fiscal 2017.