For several years, a client's physical inventory count has been lower than what was shown on the books at the time of the count so that downward adjustments to the inventory account were required. Contributing to the inventory problem could be weaknesses in internal control that led to the failure to adjust the accounting records for some:
A) purchases returned to vendors.
B) sales returns received.
C) sales discounts allowed.
D) cash purchases.

Question

Quizplus · Accepted Answer

Failure to adjust the accounting records for purchases returned to vendors would result in inventory being overstated, as the returned goods would still be recorded as inventory on the books.

For Several Years, a Client's Physical Inventory Count Has Been