Use the Following Information for Questions

question 3

Multiple Choice

Use the following information for questions.
Giselle Ltd.is a calendar-year corporation.Its financial statements for the years 2018 and 2017 contained errors as follows:
-Assume that no correcting entries were made at December 31, 2017, or December 31, 2018 and that no additional errors occurred in 2016.Ignoring income taxes, by how much will working capital, at December 31, 2016 be overstated or understated?

• A)$0
• B)$4,000 overstated
• C)$4,000 understated
• D)$6,000 understated

Identify the significance of replenishment lead time and lot size on inventory levels and costs.

Understand the categorization of production materials based on value/cost and criticality.

Acknowledge the strategies to mitigate the hockey stick phenomenon in sales.

Recognize the factors involved in sourcing processes including supplier selection and contract design.

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Definitions:

Unsecured Debts

Financial obligations that are not backed by collateral, making them riskier for lenders and potentially resulting in higher interest rates for borrowers.

Maturities

The dates on which financial obligations or debt instruments (such as bonds, loans, or other forms of securities) are due to be paid off.

Unfunded Liabilities

Obligations for which sufficient assets have not been set aside and are not currently funded by investment.

Notes

Short for promissory notes, these are debt instruments whereby one party promises in writing to pay a determinate sum of money to the other at a specified date or upon demand.