45. On June 15, 2012, Wynne Corporation accepted delivery of merchandise which it pur-chased on account. As of June 30, Wynne had not recorded the transaction or included the merchandise in its inventory. The effect of this on its balance sheet for June 30, 2012 would be a. assets and stockholders' equity were overstated but liabilities were not affected. b. stockholders' equity was the only item affected by the omission. c. assets, liabilities, and stockholders' equity were understated. d. none of these.
Test Bank for Intermediate Accounting, Fourteenth Edition 8 - 12 46. What is the effect of a $50,000 overstatement of last year's inventory on current years ending retained earning balance? 47. Which of the following is a product cost as it relates to inventory? 48. Which of the following is a period cost? 49. Which method may be used to record cash discounts a company receives for paying suppliers promptly? a. Net method. b. Gross method. c. Average method. d. a and b. 50. Which of the following is included in inventory costs? 51. Which of the following is correct? 52. All of the following costs should be charged against revenue in the period in which costs are incurred exceptfor
53. Which of the following types of interest cost incurred in connection with the purchase or manufacture of inventory should be capitalized as a product cost? a. Purchase discounts lost b. Interest incurred during the production of discrete projects such as ships or real estate projects c. Interest incurred on notes payable to vendors for routine purchases made on a repetitive basis d. All of these should be capitalized.
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- Spring '13