Physical Inventory Count, Ownership of Goods, and Consigned Goods Video Lessons

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Problem: Dane Co. received merchandise on consignment. As of March 31, Dane had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be a. no effect. b. net income was correct and current assets and current liabilities were overstated. c. net income, current assets, and current liabilities were overstated. d. net income and current liabilities were overstated.

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Problem Details

Dane Co. received merchandise on consignment. As of March 31, Dane had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be

a. no effect.

b. net income was correct and current assets and current liabilities were overstated.

c. net income, current assets, and current liabilities were overstated.

d. net income and current liabilities were overstated.

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Our tutors rated the difficulty ofDane Co. received merchandise on consignment. As of March 31...as medium difficulty.

What professor is this problem relevant for?

Based on our data, we think this problem is relevant for Professor Reinking's class at UCF.