What Is the Effect on the Cost of Goods Sold

question 45

Multiple Choice

What is the effect on the cost of goods sold account when the inventory account is overstated?

• A) It is overstated.
• B) It is not affected.
• C) It is increased disproportionately.
• D) It is understated.

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Definitions:

Cafeteria Manager

An individual responsible for overseeing the operations of a cafeteria, including food preparation, menu planning, and staff management.

Car Keys

Physical keys or electronic devices used to lock, unlock, and start an automobile.

Gross Negligence

A severe lack of care or attention to duty that represents a reckless disregard for the safety or lives of others, often leading to serious harm or damage.

Slight Negligence

The failure to use that degree of care that persons of extraordinary prudence and foresight are accustomed to use.