Response to the following problem:
Indicate the effect of each of the following errors on a company's balance sheet and income statement of the current and succeeding years:
a. The ending inventory is overstated.
b. Merchandise received was not recorded in the Purchases account until the succeeding year although the item was included in inventory of the current year.
c. Merchandise purchases shipped FOB shipping point were not recorded in either the Purchases account or the ending inventory.
d. The ending inventory was understated as a result of the exclusion of goods sent out on consignment.