If a Company Uses the Periodic Inventory System, What Is

question 68

Multiple Choice

If a company uses the periodic inventory system, what is the impact on net income of including goods in transit F.o.b. shipping point in purchases, but not ending inventory?

• A) Overstate net income.
• B) Understate net income.
• C) No effect on net income.
• D) Not sufficient information to determine effect on net income.

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Definitions:

Scurvy

A disease resulting from a deficiency of vitamin C, leading to symptoms such as anemia, debility, and gum disease.

Vitamin C

An essential nutrient that acts as an antioxidant, supports the immune system, and is necessary for the synthesis of collagen.

Pulp Cavity

The innermost part of a tooth, containing nerves, blood vessels, and connective tissue.

Dentin

A calcified tissue that forms the main body of a tooth beneath the enamel and surrounds the tooth pulp.