Fred Received Merchandise on Consignment from Dino

question 36

Multiple Choice

Fred received merchandise on consignment from Dino. As at January 31, Fred included the goods in inventory, but did NOT record the transaction. The effect of this on Fred's financial statements for January 31 would be

• A) net income, current assets, and retained earnings were understated.
• B) net income was correct and current assets were understated.
• C) net income, current assets, and retained earnings were overstated.
• D) net income and current assets were overstated and current liabilities were understated.

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Definitions:

S&P 500

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Market Value Weight

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Investment funds that continually issue new shares and buy back existing shares from investors, without a fixed number of shares.

Guaranteed Rate

A fixed interest rate agreed upon in a financial contract, ensuring that the rate will not change for the contract's duration.