Overstating Ending Inventory Will Overstate All of the Following Except

question 213

Multiple Choice

Overstating ending inventory will overstate all of the following except

• A) assets.
• B) cost of goods sold.
• C) net income.
• D) owner's equity.

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Definitions:

Output Levels

The quantities of goods or services produced by a firm or industry at a given time or under certain conditions.

Economies of Scale

The economic gains achieved by businesses because of their large scale, volume of production, or extent of operations, which usually results in a reduction in the cost per unit as the scale of operation grows.

Cost-output Elasticity

Cost-output elasticity measures the responsiveness of the cost of producing a good to a change in the output level, indicating how costs change as production scales.

Marginal Cost

The increase in expenditure resulting from the production of an additional unit of a good or service.