In the Following Questions, Inventory Errors Are Noted for 2009

question 24

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

- $$\begin{array} { | l | l | l | } \hline { \text { Error } } & \text { Cost of goods sold } & \text { Retained earnings } \\\hline \begin{array} { l } \text { Ignored items purchased and owned } \\\text { that were still in transit. }\end{array} & & \\\hline\end{array}$$

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Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched.

Schemas

Cognitive frameworks that help individuals organize and interpret information in the world around them.

Biopsychosocial Approach

A framework that attributes complex phenomena or illnesses to the interaction of biological, psychological, and social factors.

Cross-Sectional Study

A type of observational research that analyzes data from a population, or a representative subset, at a specific point in time.