(Figure)Which of the following would cause periodic ending inventory to be overstated?

Goods held on consignment are omitted from the physical count.

Goods purchased and delivered, but not yet paid for, are included in the physical count.

Purchased goods shipped FOB destination and not yet delivered are included in the physical count.

None of the above

(Figure)How long does it take an inventory error affecting ending inventory to correct itself in the
financial statements? Explain.

(Figure)What type of issues would arise that might cause inventory errors?

Causes of inventory errors might be related to consigned goods, goods delivered before or after the title
transfers, sloppy inventory counts, lost records, calculation errors, and any other circumstance that
causes inaccuracy in the counts.

(Figure)If a group of inventory items costing $15,000 had been omitted from the year-end inventory
count, what impact would the error have on the following inventory calculations? Indicate the effect
(and amount) as either (a) none, (b) understated $______, or (c) overstated $______.

Inventory Item None or amount? Understated or overstated?

Beginning Inventory    

Purchases    

Goods Available for

   
Sale

Ending Inventory    

Cost of Goods Sold    

(Figure)If Wakowski Company’s ending inventory was actually $86,000 but was adjusted at year end to a
balance of $68,000 in error, what would be the impact on the presentation of the balance sheet and
income statement for the year that the error occurred, if any?