Assume that a $400 purchase invoice received close to year-end is not recorded in fiscal 2012, but the inventory is appropriately included in the ending inventory count. What impact will this have on fiscal 2013 financial reporting?
A)Cost of sales is overstated by $400.
B)Gross margin is overstated.
C)Cost of goods available for sale is understated.
D)There is no effect on fiscal 2013.

Question

Quizplus · Accepted Answer

The Answer of Assume that a $400 purchase invoice received close to year-end is not recorded in fiscal 2012, but the inventory is appropriately included in the ending inventory count. What impact will this have on fiscal 2013 financial reporting?
A)Cost of sales is overstated by $400.
B)Gross margin is overstated.
C)Cost of goods available for sale is understated.
D)There is no effect on fiscal 2013.

Assume That a $400 Purchase Invoice Received Close to Year-End