Rossiter Company Failed to Record a Credit Sale at the End

question 119

Multiple Choice

Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct?

• A) Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated.
• B) Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated.
• C) Accounts receivable was not affected, inventory was understated, sales were understated, and cost of goods sold was understated.
• D) Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected.

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Definitions:

Variance

A measure of the dispersion or spread of a set of data points around their mean (average) value, indicating how far the data points are from the mean.

Unbiased Estimator

A statistical estimator whose expected value is equal to the parameter it estimates, indicating it does not overestimate or underestimate the true value.

Population Parameter

A Population Parameter is a value that represents a characteristic of an entire population, such as its mean or standard deviation.

Sample Statistic

A numerical measure calculated from a set of data extracted from a larger population, used to estimate population parameters.