During the Taking of Its Physical Inventory on December 31

question 165

Essay

During the taking of its physical inventory on December 31, Almond Supplies Company incorrectly counted its inventory as $545,000 instead of the correct amount of $554,000.
(a) Indicate the effects of the misstatement on Almond Supplies Company's balance sheet and income statement for the year ended December 31.
(b) If uncorrected, what would be the effects of the error on next year's balance sheet and income statement?

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Definitions:

Alternating Current

Electrical current that periodically reverses direction, in contrast to direct current that flows in only one direction.

Omnidirectional

Characteristic of an antenna that can send or receive signals equally well in all directions.

Unidirectional

Moving or operating in a single direction, often used to describe devices that allow current to flow only one way, like diodes.

Bidirectional

Capable of moving or functioning in two opposite directions.