ACC 304 All Assignments ACC 304 All Assignments | Page 86

44. Feine Co. accepted delivery of merchandise which it purchased
on account. As of December 31, Feine had recorded the transaction,
but did not include the merchandise in its inventory. The effect of this
on its financial statements for December 31 would be
a. net income, current assets, and retained earnings were
understated.
b. net income was correct and current assets were understated.
c. net income was understated and current liabilities were overstated.
d. net income was overstated and current assets were understated.
45. On June 15, 2012, Wynne Corporation accepted delivery of
merchandise which it pur-chased on account. As of June 30, Wynne had
not recorded the transaction or included the merchandise in its
inventory. The effect of this on its balance sheet for June 30, 2012
would be