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In the Following Questions, Inventory Errors Are Noted for 2009

question 96

Essay

In the following questions, inventory errors are noted for 2009. Assume that the errors are not discovered until 2010, and that the company uses a periodic inventory system. Indicate the effect of the error, if any, on the accounts noted in the columns, using the following code:
U = understated; O = Overstated; NE = No effect

-  Error  Cost of goods sold  Retained earnings  Unrecorded purchases \begin{array} { | l | l | l | } \hline { \text { Error } } & \text { Cost of goods sold } & \text { Retained earnings } \\\hline \text { Unrecorded purchases } & & \\\hline\end{array}


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