An Error in the Physical Count of Goods on Hand

question 2

Multiple Choice

An error in the physical count of goods on hand at the end of the current period resulted in a $2,500 overstatement of the ending inventory. The effect of this error in the current period is to:

• A) overstate cost of goods sold.
• B) understate cost of goods available for sale.
• C) understate gross profit.
• D) overstate net income.

---

Definitions:

Statistics Canada

Canada's national statistical agency tasked with compiling data on the country's economy, society, and environmental conditions.

Alpha

In statistics, it represents the level of significance, marking the threshold for rejecting the null hypothesis; in finance, it denotes the active return on an investment compared to a benchmark index.

Power of the Test

The power of the test refers to the probability that the test correctly rejects a false null hypothesis, effectively detecting an actual effect when it exists.

Unemployment Rate

The rate of individuals in the workforce who are not employed but are seeking a job.