Moreland Ltd. Reported net sales of $10 million and net income of $3 million in 2014. Based on this information, which of the following is an example of a material misstatement on Moreland's 2014 financial statements?
Sales equal to $100,000 were recorded before goods were shipped to the customers.
Raw materials purchases of $500,000 were received before yearend but remain unaccrued pending receipt of the vendors' invoices.
The inventory account included $125,000 worth of obsolete inventory.