A Company Fails to Record One Storeroom Full of Inventory

question 174

Multiple Choice

A company fails to record one storeroom full of inventory in its year-end inventory records.As a result, this will cause:

• A)an overstatement of inventory on the year-end balance sheet.
• B)an understatement of gross profit in the following year.
• C)an overstatement of retained earnings at the end of the year.
• D)an overstatement of cost of goods sold for the current year.

---

Definitions:

Yerkes-Dodson Law

Law stating that when tasks are simple, a higher level of arousal leads to better performance; when tasks are difficult, lower levels of arousal lead to better performance.

Need for Achievement

A psychological trait that drives individuals to succeed in their goals, often pushing them to overcome challenges and achieve high standards.

Physical Activity

Physical activity refers to any bodily movement produced by skeletal muscles that requires energy expenditure, including activities undertaken while working, playing, carrying out household chores, traveling, and engaging in recreational pursuits.

Attention

The cognitive process of selectively concentrating on one aspect of the environment while ignoring other stimuli.