Match Each Situation to Its Impact (A-C) on the Current

question 139

Multiple Choice

Match each situation to its impact (a-c) on the current year's net income.
-Purchased merchandise was shipped FOB shipping point on the last day of the year. The cost of the merchandise was not included in ending inventory.

• A)Net income for the current year will be overstated.
• B)Net income for the current year will be understated.
• C)There will be no error effect on net income.

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Definitions:

Positive Feedback Loop

A process where the end product of an action causes more of that action to occur in a feedback loop that amplifies itself.

Negative Feedback Loop

A process in a system where some function of the output of a system process reduces the effect of changes in the input, stabilizing the system.

Chemical Reactions

Processes in which substances interact to form new substances with different chemical and physical properties.

Scientific Laws

Principles based on empirical evidence that describe and predict natural phenomena, often expressed in mathematical form.