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When reviewing the operations of the boundary show that receiving reports arrived in stores on23/12/2012 for $50,0, but the purchase invoice was recorded only in04.01.2013 and it must be registered a JV to the leads to: a) Decrease earnings by $50 b) Increase earnings by $50 c) Affect only to the inventory d) Not one of the above
c
C
Affect only the Inventory.
The Answere is Option A
Becasue as Purchases are under valued by $50 the earning needs to be decreased as far as inventory is concerned as GRN is issued the inventory will present the real value of the closing stock or by physical count it will be the same and will have no affect as the JV is issued.
The answer is C.
Effect would be by recording of inventory received (by Debiting) and Credit payable to Vendor (if purchased on credit) else credit to advance (given if any).
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