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Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

Question 1

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2016,but the inventory was excluded in error during the ending inventory count.What impact will this have on fiscal 2016 financial reporting?


A) Cost of goods sold is understated by $1,000.
B) Gross margin is overstated by $1,000.
C) Ending inventory is understated by $1,000.
D) Net income is overstated by $1,000.

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