Which of the Following Best Describes Why Inventory Errors Are

question 117

Multiple Choice

Which of the following best describes why inventory errors are often said to be "self-correcting"?

• A) Inventory errors have no impact on the income statement.
• B) An inventory error in the current period will have a reverse effect in the next period.
• C) An inventory error in the current period will have the same effect in the next period.
• D) Inventory errors have no impact on the balance sheet.

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Definitions:

Primacy Effect

A psychological phenomenon where the first pieces of information presented are better remembered than information presented later.

Halo Effect

The tendency to assume that a person has generally positive or negative traits as a result of observing one major positive or negative trait.

Fundamental Attribution Errors

The tendency to overemphasize personality-based explanations for behaviors observed in others while underemphasizing the role of situational factors.

Situational Attribution

Attributing a behavior to some external cause or factor operating within the situation; an external attribution.