An Inventory Acquisition Is Received Late in the Afternoon of December

question 54

Multiple Choice

An inventory acquisition is received late in the afternoon of December 31 after the physical inventory is completed.If the acquisition is included in accounts payable and purchases, but excluded from inventory, the result:

• A) does not affect earnings.
• B) is indeterminable from the information given.
• C) is an understatement of net earnings.
• D) is an overstatement of net earnings.

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Definitions:

Income Tax

A tax that governments impose on income generated by businesses and individuals within their jurisdiction.

Aggregate Demand

The total demand for all goods and services in an economy at a given overall price level and within a specified time period.

Aggregate Demand

Total economic demand for goods and services within an economy, calculated at a fixed price level during a designated time frame.

Aggregate Supply

The total supply of goods and services that firms in an economy plan to sell during a specific time period at different possible price levels.