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Which of the following would not be a component of the yearend inventory balance Freight in costs Inventory inspection costs Inventory preparation costs Inventoryrelated selling costs Hollander

Which of the following would not be a component of the year-end inventory balance? Freight in costs. Inventory inspection costs. Inventory preparation costs. Inventory-related selling costs. Hollander Company hired some students to help count inventory during their semester break. Unfortunately, the students added incorrectly and the 2016 ending inventory was overstated by dollar 5,000. What would be the effect of this error in ending inventory? 2016 net income would be overstated. 2016 net income would be understated. 2016 ending retained earnings would be understated. 2016 cost of goods sold would be overstated. Which of the following statements is incorrect for a manufacturing entity? Inventory is transferred from work in process to finished goods. Raw materials used are transferred to work in process. Finished goods inventory eventually becomes cost of goods sold. Cost of goods sold is recognized when the manufacturing process is complete. Which of the following statements is correct? Cost of goods available for sale is allocated between costs of goods sold and inventory at year-end. A purchase of inventory on credit increases both cost of goods available for sale and cost of goods sold. Purchases of inventory during a period less that period's cost of goods sold equals ending inventory regardless of the beginning inventory amount. Cost of goods available for sale equals ending inventory plus purchases.

 

Apr 05 2020 View more View Less

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