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Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?

Which of the following describes the result if an organization records merchandise as a purchase, but fails to include it in the closing inventory count?
A . The cost of goods sold for the period will be understated.
B . The cost of goods sold for the period will be overstated.
C . The net income for the period will be understated.
D . There will be no effect on the cost of goods sold or the net income for the period.

Answer: B

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