Dolan Co Received Merchandise on Consignment

question 121

Multiple Choice

Dolan Co. received merchandise on consignment. As of March 31, Dolan had recorded the transaction as a purchase and included the goods in inventory. The effect of this on its financial statements for March 31 would be

• A) no effect.
• B) net income was correct and current assets and current liabilities were overstated.
• C) net income, current assets, and current liabilities were overstated.
• D) net income and current liabilities were overstated.

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Definitions:

Monopolists

Individuals or entities that hold a monopoly, controlling the entire supply of a good or service in a particular market, eliminating competition.

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust to market conditions.

Plant Size

The physical capacity or scale of a manufacturing facility, which can influence production output and operational efficiency.

Factors Of Production

The resources used in the creation of goods or services, traditionally categorized into land, labor, capital, and entrepreneurship.