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While looking over a newly assigned construction service client, you realize that there is inventory on the books and several different supplies accounts, with one begin marked as income, which has a negative balance. What do you believe is going on with this client?1) the client must be purchasing items for resale and forgetting to put them into inventory and making the items as supplies expense and supplies sales2) inventory is being used incorrectly and the supplies expense account is correct, with the supplies income being an incorrect posting3)the client must be debiting supplies income when selling from the inventory account4) the client must be putting all supplies as inventory and only using the supplies expense when they are being used |
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Answer» Answer: must be PURCHASING items for RESALE and FORGETTING to put themselves into INVENTORY and making the items as SUPPLIES expense and supplies salesman 2) inventory is being used incorrectly and another |
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