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

-$$\begin{array} { | l | l | l | }
\hline { \text { Error } } & \text { Cost of goods sold } & \text { Retained earnings } \
\hline \begin{array} { l }
\text { Recorded purchases for } \$ 523,000 \text { that } \
\text { should have been } \$ 532,000 .
\end{array} & & \
\hline
\end{array}$$

Question

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

-$$\begin{array} { | l | l | l | } 
\hline  { \text { Error } } & \text { Cost of goods sold } & \text { Retained earnings } \
\hline \begin{array} { l } 
\text { Recorded purchases for } \$ 523,000 \text { that } \
\text { should have been } \$ 532,000 .
\end{array} & & \
\hline
\end{array}$$

Quizplus · Accepted Answer

The Answer of  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

-$$\begin{array} { | l | l | l | } 
\hline  { \text { Error } } & \text { Cost of goods sold } & \text { Retained earnings } \
\hline \begin{array} { l } 
\text { Recorded purchases for } \$ 523,000 \text { that } \
\text { should have been } \$ 532,000 .
\end{array} & & \
\hline
\end{array}$$

In the Following Questions, Inventory Errors Are Noted for 2009