Mineral Makers (MM) Company Keeps Its Inventory Records Using a Perpetual

question 93

Multiple Choice

Mineral Makers (MM) Company keeps its inventory records using a perpetual system.At December 31, 2011, the unadjusted balance in the inventory account is $64,000.Through a physical count on December 31, 2011, MM determines that its actual merchandise inventory at year-end is $62,500.Which of the following is true regarding the statement of financial position and the income statement of MM at December 31, 2011?

• A)Inventory is increased and cost of goods sold is decreased by $1,500.
• B)Inventory is decreased and cost of goods sold is increased by $1,500.
• C)Inventory is increased and cost of goods sold is increased by $1,500.
• D)Inventory is decreased and cost of goods sold is decreased by $1,500.

---

Definitions:

Unconscious Mental Image

Visual or symbolic representations in the mind that are not immediately accessible to conscious awareness.

Free Association

Method of uncovering unconscious conflicts in which the client is taught to talk about whatever comes to mind, without censoring any thoughts.

Humanistic

An approach in psychology that emphasizes empathy and stresses the good in human behavior, focusing on the individual's potential for growth and self-actualization.

Innate Capacity

An inherent ability or potential present from birth, not developed through experience.