A Company Uses the Periodic Inventory Method and the Beginning $\begin{array}{ll}\text {\quad\quad Assets }&\text {\quad\quad Equity }\\\end{array}$

question 87

Multiple Choice

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000.The amounts reflected in the current end of the period statement of financial position are
$\begin{array}{ll}\text {\quad\quad Assets }&\text {\quad\quad Equity }\\\end{array}$

• A)\(\begin{array}{ll}\text { Overstated } & \text { Overstated } \\\end{array}\)
• B)\(\begin{array}{ll}\text { Correct } & \text {\quad\quad Correct } \\\end{array}\)
• C)\(\begin{array}{ll}\text { Understated } & \text { Understated } \\\end{array}\)
• D)\(\begin{array}{ll}\text { Overstated } & \text {\quad Correct }
• \end{array}\)

---

Definitions:

Acoustic Coding

A process by which information is remembered and stored in the brain as a sequence of sounds, often used in studies of short-term and working memory.

Long-term Memory

The phase or type of memory responsible for the storage of information over an extended period, ranging from a few days to decades.

Long-term Memory

The phase of the memory process that involves the storage of information over extended periods of time, practically unlimited in capacity.

Chunking

Chunking is a process in memory whereby individuals group information into larger, more manageable units or chunks.