The Adjustment for Factory Depreciation Expense Was Ignored

question 10

Multiple Choice

The adjustment for factory depreciation expense was ignored.This error will cause:

• A)the cost of goods manufactured to be overstated.
• B)the cost of goods sold to be understated.
• C)the net income to be understated.
• D)Answers A and C are correct.

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Definitions:

Cut the Price

To reduce the selling price of a product or service.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good changes in response to a change in its price.

Close Substitutes

Products or services that can be used in place of one another with little difference in satisfaction for the consumer, leading to a high cross-elasticity of demand.

Supply

The total amount of a good or service that is available for purchase at any given price level.