The Purchase of Direct Materials Was Recorded as the Purchase

question 43

Multiple Choice

The purchase of direct materials was recorded as the purchase of office supplies.This error will cause:

• A)the cost of goods manufactured to be overstated.
• B)the cost of goods sold to be overstated.
• C)the net income to be overstated.
• D)None of these is correct.

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Definitions:

Median Household Income

The income amount that divides households into two equal groups, half having income above that amount and half having income below that amount.

Mean Household Income

The average income across all households.

Negative Income Tax

A government program that supplements the income of low-income working families.

Income Supplements

Financial support or assistance provided to individuals or families to help supplement their income and support their living expenses.