You are examining the financial statements of France Company for the year ended December 31, 2022. It uses the physical inventory system of accounting for inventory. During your examination, you discovered that the 2023 sales of P 120,000 were recorded in 2022; goods were excluded in the 2022 ending inventory at a cost of 70,000. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) overstated by P 120,000 at the end of year 2022 as a result of the error? Select 1 sales Onlv a. Sales and Accounts Receivable b. Inventory, December 31, 2022 only c. Retained Earnings only Question 2: Which of the following accounts is (are) understated by p 70,000 at the end of year 2022 as a result of the error? Select 1 a. retained earnings b. inventory, december 31,2022 c. sales and accounts receivable d. sales and retained earnings
You are examining the financial statements of France Company for the year ended December 31, 2022. It uses the physical inventory system of accounting for inventory. During your examination, you discovered that the 2023 sales of P 120,000 were recorded in 2022; goods were excluded in the 2022 ending inventory at a cost of 70,000. Based on the foregoing, answer the following questions: Question 1: Which of the following accounts is(are) overstated by P 120,000 at the end of year 2022 as a result of the error? Select 1 sales Onlv a. Sales and Accounts Receivable b. Inventory, December 31, 2022 only c. Retained Earnings only Question 2: Which of the following accounts is (are) understated by p 70,000 at the end of year 2022 as a result of the error? Select 1 a. retained earnings b. inventory, december 31,2022 c. sales and accounts receivable d. sales and retained earnings
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter6: Accounting For Merchandising Businesses
Section: Chapter Questions
Problem 36E: The following data were extracted from the accounting records of Harkins Company for the year ended...
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Question
You are examining the financial statements of France Company for the year ended
December 31, 2022. It uses the physical inventory system of accounting for inventory.
During your examination, you discovered that the 2023 sales of P 120,000 were
recorded in 2022; goods were excluded in the 2022 ending inventory at a cost of
70,000.
Based on the foregoing, answer the following questions:
Question 1: Which of the following accounts is(are) overstated by P 120,000 at the
end of year 2022 as a result of the error?
Select 1
sales Onlv
a. Sales and Accounts Receivable
b. Inventory, December 31, 2022 only
c. Retained Earnings only
Question 2: Which of the following accounts is (are) understated by p 70,000 at the
end of year 2022 as a result of the error?
Select 1
a. retained earnings
b. inventory, december 31,2022
c. sales and accounts receivable
d. sales and retained earnings
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