The Ending Merchandise Inventory Was Understated

question 11

Multiple Choice

The ending merchandise inventory was understated.This error would cause:

• A)assets to be understated.
• B)assets to be overstated.
• C)net income to be overstated.
• D)None of these is correct.

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Definitions:

Hindsight Bias

The inclination to see events that have already occurred as being more predictable than they were before they took place.

Critical Thinking

Dedicated to an in-depth inspection and critique of a problem with the intent of deriving a verdict.

Overconfidence

Overconfidence is a cognitive bias in which a person's subjective confidence in their abilities or outcomes exceeds the objective accuracy of those assessments.

Hypothesis

A tentative explanation put forward based on minimal evidence, intended as a preliminary point for more detailed research.