Question

9.On December 31, 2015, Jones Company understated ending inventory by $52,000. How does this error affect Cost of Goods Sold and Net Income for 2015?

Overstates Cost of Goods Sold and understates Net Income

Overstates both Cost of Goods Sold and Net Income

Understates Cost of Goods Sold and overstates Net Income

Leaves both Cost of Goods Sold and Net Income correct because the errors cancel each other

10. Comfort Clothing had the following financial data for the year ended December 31, 2015:

Cost of Goods Sold

$ 256,000

Beginning Merchandise Inventory

$ 58,000

Ending Merchandise Inventory

What is the inventory turnover for Comfort Clothing (rounded to one decimal place)?

0.7 times per year

1.6 times per year

2.4 times per year

3.1 times per year