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Alexandros Stathopoulos
on Nov 12, 2024

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Purchased merchandise was shipped FOB shipping point on the last day of the year. The cost of the merchandise was not included in ending inventory.

A) Net income for the current year will be overstated.
B) Net income for the current year will be understated.
C) There will be no error effect on net income.

FOB Shipping Point

This term indicates that the buyer is responsible for the goods and their shipping costs as soon as the goods leave the seller's premises.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

Ending Inventory

The closing stock value, determined at the end of a financial period, is the sum of the initial inventory and acquisitions, less the cost of goods sold.

  • Recognize the impact of inventory management on a company’s financial statements.
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mbuyi masengoNov 14, 2024
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