At the balance sheet date, Clarkson Company held title to goods in transit amounting to $214,000....

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At the balance sheet date, Clarkson Company held title to goodsin transit amounting to $214,000. This amount was omitted from thepurchases figure for the year and also from the ending inventory.What is the effect of this omission on the net income for the yearas calculated when the books are closed? What is the effect on thecompany’s financial position as shown in its balance sheet? Ismateriality a factor in determining whether an adjustment for thisitem should be made?

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What is the effect of this omission on the net income for the year as calculated when the books are closed The omission of goods in transit for 214000 will not affect the net income    See Answer
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At the balance sheet date, Clarkson Company held title to goodsin transit amounting to $214,000. This amount was omitted from thepurchases figure for the year and also from the ending inventory.What is the effect of this omission on the net income for the yearas calculated when the books are closed? What is the effect on thecompany’s financial position as shown in its balance sheet? Ismateriality a factor in determining whether an adjustment for thisitem should be made?

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