The accountant for Angie Company made the following errors related to purchases of merchandise and ending inventory in 2013:
1.A $2,200 purchase of merchandise on credit was not recorded or included in ending inventory.
2.A $3,180 purchase of merchandise on credit was recorded, but it was inadvertently omitted from the end-of-year physical inventory count.
Assuming a periodic inventory system, Angie's Company's 2013 net income will be
A) understated by $3,180
B) understated by $2,380
C) overstated by $5,380
D) overstated by $3,180
Correct Answer:
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