Items that were incorrectly omitted from 2013 credit purchases, but correctly included in the 2013 ending inventory would have the following 2013 effects:
A) overstate pre-tax income but have no effect on current liabilities.
B) overstate pre-tax income and understate liabilities.
C) cancel out with no effect on pre-tax income but would understate current liabilities.
D) understate pre-tax income but have no effect on liabilities.

Question

Quizplus · Accepted Answer

The Answer of Items that were incorrectly omitted from 2013 credit purchases, but correctly included in the 2013 ending inventory would have the following 2013 effects:
A) overstate pre-tax income but have no effect on current liabilities.
B) overstate pre-tax income and understate liabilities.
C) cancel out with no effect on pre-tax income but would understate current liabilities.
D) understate pre-tax income but have no effect on liabilities.

Items That Were Incorrectly Omitted from 2013 Credit Purchases, but Correctly