In the following questions, inventory errors are noted for 2018. Assume that the errors are not discovered until 2019, 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

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

Question

In the following questions, inventory errors are noted for 2018. Assume that the errors are not discovered until 2019, 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

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

Quizplus · Accepted Answer

The Answer of In the following questions, inventory errors are noted for 2018. Assume that the errors are not discovered until 2019, 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

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

In the Following Questions, Inventory Errors Are Noted for 2018