On December 15, 2016, Transport Company Accepted Delivery of Merchandise

question 43

Multiple Choice

On December 15, 2016, Transport Company accepted delivery of merchandise that it purchased on credit. As of December 31, 2016, the company had neither recorded the transaction nor included the merchandise in its ending inventory amount because the seller's invoice had not been received. The effect of this omission on its balance sheet at December 31, 2016, (end of the accounting period) was that

• A)inventory and net income were overstated but liabilities were correct.
• B)net income was the only item affected by the omission.
• C)inventory and accounts payable were understated but net income was correct.
• D)assets and stockholders' equity were understated but liabilities were correct.

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Definitions:

Calories

A unit of energy used to quantify the amount of energy provided by food and drink, and energy used by bodily activities.

TPN Solution

Total Parenteral Nutrition, a medical solution given intravenously to provide nutritional support to patients who cannot eat or absorb enough nutrients through their gastrointestinal tract.

Trivializing

The act of making something seem less important or significant than it really is, often minimizing serious issues or reducing the perception of value.

Overly Informal

Describes a style of communication that may be too casual or familiar for the context or audience it is intended for.