#1 If Croder, Inc. underestimates its ending inventory balance in year 1 and it records...
90.2K
Verified Solution
Link Copied!
Question
Accounting
#1
If Croder, Inc. underestimates its ending inventory balance in year 1 and it records ending inventory correctly in year 2, which of the following is true?
A) Net Income is understated in year 2
B) Net Income is overstated in year 1
C) Retained Earnings is understated at the end of year 2
D) Costs of goods sold is understated in year 2
#2
Croder, Inc. accounts for bad debts using the allowance method. On September 1, Corder wrote-off a customer's $2,500 account balance. Croder believes the customer will never pay any portion of this balance owed to Croder. What effect will this write-off have on Croder's balance sheet at the time of this write-off.
A) An increase to stockholders equity and a decrease to liabilities
B) A decrease to assets and a decrease to stockholders equity
C) An increase to assets and an increase to stockholders equity
D) no effect
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
