If the Amount Assigned to Ending Inventory Is Incorrect

question 46

Multiple Choice

If the amount assigned to ending inventory is incorrect,

• A)the balance sheet is affected, but the income statement is not.
• B)the income statement is affected, but the balance sheet is not.
• C)the balance sheet is affected, but cost of goods sold is not.
• D)both the balance sheet and income statement are affected.

---

Definitions:

Tenancy at Sufferance

A legal situation where a tenant remains in possession of property after the expiration of the lease, without the landlord's consent.

Fee Simple Tenancy

The most complete form of ownership of real property, giving the holder full possessory rights and responsibilities now and in the future.

Security Deposits

Funds paid in advance as security for the performance of a contract, such as renting property, and may be refundable depending on the terms of the agreement.

Remedying Ordinary Wear

The act of repairing or maintaining items to address the normal deterioration occurring from regular use.