Merchandise Inventory at the End of the Year Is Overstated

question 126

Multiple Choice

Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?

• A) Owner's equity is overstated.
• B) Cost of merchandise sold is overstated.
• C) Gross profit is understated.
• D) Net income is understated.

Grasp the concept of cognitive dissonance and identify situations that produce dissonance.

Identify the components and evolution of the theory of planned behavior.

Recognize the role of subjective norms, behavioral intention, and perceived behavioral control in shaping behavior according to the theory of planned behavior.

Understand effort justification and other dissonance-reducing strategies.