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MMLU / Arno Co. did not record a credit purchase of merchandise made prior to year end.…

Problem

Answer published by the source. Consult the official source to check your work against its answer.

question

Arno Co. did not record a credit purchase of merchandise made prior to year end. However the merchandise was correctly included in the year-end physical inventory. What effect did the omission of reporting the purchase of merchandise have on Arno's balance sheet at year end? Assets Liabilities

choices

  1. No effect No effect
  2. No effect Understated
  3. Understated No effect
  4. Understated Understated

subject

professional_accounting

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Source and history

Official source

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