Assume That a $1,000 Purchase Invoice Received Close to Year-End

question 152

Multiple Choice

Assume that a $1,000 purchase invoice received close to year-end is not recorded in fiscal 2012, but the inventory is appropriately included in the ending inventory count. What impact will this have on fiscal 2012 financial reporting?

• A)Purchases are overstated.
• B)Purchases are understated.
• C)Gross margin is understated.
• D)Cost of sales is overstated.

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