Under the periodic inventory method, if merchandise is sold for cash on December 31 and is recorded as a sale but is NOT shipped (and thus is included in the ending inventory count), the financial statements will

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If the merchandise is included in the ending inventory count, it will be recorded as an asset on the balance sheet, which will result in an overstatement of assets since the merchandise has actually been sold. This will not have an impact on net income or liabilities as they are not related to the merchandise not being shipped.

Under the Periodic Inventory Method, If Merchandise Is Sold for Cash