Incorrect answers receive negative feedback. A purchase discount was recorded as
ID: 2351200 • Letter: I
Question
Incorrect answers receive negative feedback.A purchase discount was recorded as a credit to the Purchases account - the remainder was
correctly recorded. This error will cause:
A) net income will be understated.
B) net income will be overstated.
C) total assets will be overstated.
D) None of these are correct.
The freight paid on equipment purchased F.O.B. shipping point was debited to the Freight-In
account. This error will cause:
A) net income will be understated.
B) net income will be overstated.
C) total assets will be overstated.
D) None of these are correct.
A purchase discount that was earned and taken was never recorded. This error will cause:
A) total assets will be overstated.
B) net income will be understated.
C) net income will be overstated.
D) None of these are correct.
Explanation / Answer
B) net income will be overstated. C) total assets will be overstated. A) total assets will be overstated.