If Ending Inventory on December 31, 2019, Is Overstated, Then

question 57

Multiple Choice

If ending inventory on December 31, 2019, is overstated, then:

• A) gross profit for the year ended December 31, 2020, will be understated
• B) gross profit for the year ended December 31, 2019, will be understated
• C) cost of goods sold for the year ended December 31, 2019, will be overstated
• D) cost of goods sold for the year ended December 31, 2020, will be understated

---

Definitions:

Monthly Income

The total amount of income or earnings generated by an individual, household, or entity within a month, including all sources.

Hot Dog

A cooked sausage, traditionally grilled or steamed and served in a sliced bun as a sandwich.

Price

The financial sum necessary to obtain a good, service, or property.

Budget Constraint

An economic model that depicts the combination of goods and services an individual, household, or firm can purchase, given their income and prevailing prices.