If a Company Understates Its Inventory, What Are the Effects

question 4

Multiple Choice

If a company understates its inventory, what are the effects on cost of goods sold and net income for the current year?

• A)Cost of goods sold will be understated and net income will be overstated.
• B)Cost of goods sold will be overstated and net income will be understated.
• C)Both cost of goods sold and net income will be understated.
• D)Both cost of goods sold and net income will be overstated.

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Definitions:

Promotion

An employee's upward advancement in the hierarchy of an organization.

Vacancy Model

A framework used for understanding or predicting employment vacancies within an organization, focusing on the causes and durations of vacancies and strategies for filling them.

Compensation Level

The amount of money, benefits, and rewards that an organization provides to its employees in exchange for their work and expertise.

Retain Existing Staff

The strategies and practices employed by organizations to keep their current employees engaged, motivated, and committed to the company.