number 3 Inren a com fails to us for accrued expenses then what effect will this have on that month inancial statements A) Expenses will be overstated and equity will be understated BLiabilities will be understated and equity will be overstated. Liabilities will be overstated and revenues will be understated D) Assets will be overstated and revenues will be understated There will be a question like this. Different numbers Zach's Market recorded the following events involving a recent purchase of merchandise: Received goods for $60,000, terms 3/10, n/30. Returned $2,000 of the shipment for credit. Paid $450 freight on the shipment Paid the invoice within the discount period. As a result of these events, the company's merchandise inventory (Use a T Account!) A) increased by $?????. B) increased by $?????. C) increased by $?????. D) increased by $?????. 4. Merchandise was sold by Step In It Shoe Inc. to Magu Shoes. The merchandise wa sold and shipped on December 28th, and reached the buyer on January 2nd. The invoice stated terms of FOB Shipping Point. If each company reports their financia statements on December 31st, then the merchandise inventory should be shown A) on the books of Step In It Inc. B) on the books of Magu Shoe's. C) on the books of the shipping company. D) on the books of both companies until the transaction is complete. Page 2
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