23 May WHAT ARE THE EFFECTS OF INVENTORY ERRORS?
Do you agree or disagree on the following pst? Please explain.
What are the effects of inventory errors?
Errors in the inventory effects the income statement, the value of the assets and the owner’s equity on the balance sheet. The errors in the inventory perpetuate from one period to the next. The first period’s inventory is carried over and provides the value for the beginning of the second period. In case there is an error in the inventory, for instance, the numbers are overstated; consequently the cost of goods sold would be understated (Horngren & Thomas, 2013). In other words, the allocation of the numbers between periods would incorrect. In case left unchanged, the calculation of gross profit and net income would be incorrect as well. However, between periods one and two the numbers counterbalance each other since it would be overstated in one period and understated in the following period, but they would not reflect the actual numbers, which is against the fundamental characteristics of accounting: relevance and faithful representation.
Unfortunately, there are incidents where such errors are intentional. As Horngren & Thomas (2013) states, there is one thing to make an honest mistake, but quite different to use it to commit fraud. In this case, the effects of inventory errors have much greater consequences.
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.