Question

Belle Co. received merchandise on consignment. As of March 31, Belle had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be

Answer 1

net income was correct and current assets and current liabilities were overstated.

Step-by-step explanation:

As the Belle company received the merchandise on the consignment also it is recorded as the purchase and get involved the goods in the inventory

So here the impact on the financial statement as on March 31 would be that the net income would be right but the current asset and the current liabilities would be overstated.

hence, the same is to be considered