Argyle Company Failed to Include a Number of Inventory Items

question 58

Multiple Choice

Argyle Company failed to include a number of inventory items in the inventory count at the end of the last period.Assuming no other inventory errors,the effect on the current period is

• A)an overstatement of gross profit.
• B)an understatement of COGS.
• C)an overstatement of ending inventory.
• D)an understatement of net income.

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Definitions:

Investment Tax Credit

A tax credit offered by the government to encourage businesses to invest in certain assets by allowing them to deduct a portion of the investment cost from their taxes.

Loanable Funds

The market in which savers supply funds to borrowers who want to borrow, influencing interest rates and overall economic activity.

Crowding Out

A situation where increased government spending leads to a reduction in private sector investment or spending.

Government Budget Surpluses

Occurs when a government's revenues exceed its expenditures during a specific time period, allowing for savings or debt repayment.