A Company Discovers That Its Cost of Sales Is Understated

question 65

True/False

A company discovers that its Cost of sales is understated by an insignificant amount.They do NOT need to correct the error because of the conservatism principle.

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Definitions:

Cleavage

A geological term referring to the tendency of minerals to break along specific planes of weakness due to their crystal structure.

Silicon Tetrahedron

A structural unit in silicate minerals, consisting of four oxygen atoms surrounding a silicon atom in a tetrahedral shape.

Cleavage

The tendency of a mineral to break along flat surfaces as determined by the mineral's crystal structure.

Silicate Mineral

Minerals that contain silicon and oxygen, and sometimes other elements, which make up the majority of the Earth's crust.