Author Question: If ending inventory for the year is understated, net income for the year is overstated. a. True b. ... (Read 96 times)

ARLKQ · **on:** Jul 5, 2018

If ending inventory for the year is understated, net income for the year is overstated.
a. True
b. False

Indicate whether the statement is true or false

Question 2

In 2011, Seven Seas sold 20,000 worth of merchandise on account. Its accountant estimated that 400 of that amount would be uncollectible. In 2011, Saki, a Japanese customer, purchased 500 of merchandise on account from Seven Seas.

In 2012, Saki declared bankruptcy while still owing the 500. What is the amount of bad debts expense Seven Seas should report on
December 31, 2011?
A) 100
B) 400
C) 500
D) 900