If a company receives goods but waits to record the transaction until a vendor's invoice is received, _______.
A)purchases and accounts payable will be understated
B)purchases and accounts payable will be overstated
C)purchases will be overstated and accounts payable will be understated
D)purchases will be understated and accounts payable will be overstated

Question

Quizplus · Accepted Answer

When a company waits to record a transaction until receiving a vendor's invoice, both purchases and accounts payable are not recorded immediately upon receipt of goods. This delay causes both to be understated until the transaction is recorded.

If a Company Receives Goods but Waits to Record the Transaction