Essay
a. Explain the effect of the following on the financial statements:
Goods held on consignment were included in the ending inventory count.
Goods purchased FOB shipping point were in transit on the last day of the year. The goods were not counted as part of ending inventory.
Goods sold FOB shipping point were in transit on the last day of the year. These goods were not counted as part of ending inventory.
b. What happens if inventory errors are not found and corrected?
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