Detecting, investigating & correcting discrepancy Flashcards
1
Q
impact of inventory errors on COGS
A
COGS = BI + purchases - EI
2
Q
if COGS ending inventory overstated, COGS is….
A
understated
3
Q
impact of depreciation errors on income statement through depreciation expense
A
revenue - expenses = net income
4
Q
if expenses are understated, net income is…
A
overstated (less tax impact)
5
Q
overstatements must be subtracted in order to remove them from ______ and correct the error
A
net income
6
Q
COGS is an….
A
expense
