Assume That During the Physical Count of the Inventory of a Large

question 88

Essay

Assume that during the physical count of the inventory of a large corporation last year,$650,000 of merchandise was not counted.The error was not detected,and the financial statements for the current fiscal year were prepared.Identify the individual statements that would be affected and explain the effect the error would have on each of these statements.

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Definitions:

Unilateral Mistake

A contractual misunderstanding that occurs when only one party is mistaken about a fundamental aspect of the contract.

Disclose Facts

The act of revealing or making known information that is true and relevant, often within a legal context.

Contract

A legally binding agreement between two or more parties that is enforceable by law.

Undue Influence

Persuasion that is less than actual force but more than advice and that induces a person to act according to the will or purposes of the dominating party.