An accounting clerk working for DBB neglected to record the purchase of merchandise in 20x1,which was,shipped f.o.b.shipping point on December 20,20x1,and which arrived on December 31.The goods were included in the ending 20x1 inventory.What was the effect on DBB's 20x1 cost of goods sold?

Question

Quizplus · Accepted Answer

The cost of goods sold was understated because the purchase was not recorded, meaning the cost was not included in the cost of goods sold, while the goods were included in the ending inventory.

An Accounting Clerk Working for DBB Neglected to Record the Purchase