If purchases made in one year are mistakenly recorded the following year, this error will counterbalance, that is, there will be no effect on income over a 2-year period.

Question

Quizplus · Accepted Answer

The error will overstate expenses in the year the purchases are mistakenly recorded and understate expenses in the year they should have been recorded, but over a 2-year period, the total expenses and income will be correctly stated, thus counterbalancing the mistake.

If Purchases Made in One Year Are Mistakenly Recorded the Following