Bennett Company's accountant made the following errors related to merchandise inventory in 2016:
1) The beginning inventory for 2016 was overstated by $1,900 due to an error in the physical count.
2) A $1,150 purchase of merchandise on credit was not recorded, but the items were included in the ending inventory.
Assuming a periodic inventory system, Bennett Company's 2016 cost of goods sold will be

Question

Quizplus · Accepted Answer

The beginning inventory overstatement increases COGS by $1,900, while the unrecorded purchase decreases COGS by $1,150. The net effect is an overstatement of $750 in COGS.

Bennett Company's Accountant Made the Following Errors Related to Merchandise