Zebra Company Overstated Its December 31, 2014 Inventory by $5,200

question 25

Multiple Choice

Zebra Company overstated its December 31, 2014 inventory by $5,200.Which statement is true concerning
Zebra's financial statement amounts for 2014?

• A)Working capital is understated.
• B)The current ratio is overstated.
• C)Cost of goods sold is overstated.
• D)Net income is understated.

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Definitions:

Horizontal Merger

A merger between two or more companies operating in the same industry at the same stage of production.

Vertical Merger

A business consolidation that occurs between companies that operate within the same supply chain, typically involving a manufacturer merging with a supplier or a distributor.

Conglomerate Company

A conglomerate company is a large corporation composed of diverse companies operating in various industries or sectors, typically under one corporate group.

Home-Based Businesses

Firm operated from the residence of the business owner.