If I record the transaction but don't include the merchandise in its...?

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If I record the transaction but don't include the merchandise in its...?

inventory. How does in effect the financial statement?

2007-10-08 11:27:48 · 2 answers · asked by Saw 3 in Business & Finance ➔ Other - Business & Finance

2 answers

income would be overstated, all other things being equal.

2007-10-08 11:32:20 · answer #1 · answered by Scott K 7 · 0⤊ 0⤋

If you don't include the merchandise in inventory, then how could you have recorded the transaction? If you meant you debited purchases but omitted to include the unsold merchandise in ending inventory, then your ending inventory and net income would be understated.

2007-10-08 21:33:21 · answer #2 · answered by Sandy 7 · 0⤊ 0⤋