Under the Periodic Inventory Method, If an Inventory Purchase Has

question 132

Multiple Choice

Under the periodic inventory method, if an inventory purchase has been made and recorded but has NOT yet arrived (and thus is not counted) , the financial statements will

• A) Overstate assets
• B) Overstate net income
• C) Understate net income
• D) Understate revenues

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Definitions:

Multiple Suppliers

The strategy of sourcing a particular product or service from more than one supplier to reduce supply risk.

Supply Disruption

An unexpected event that interrupts the normal flow of goods and materials in a supply chain, potentially leading to stockouts, increased costs, or delivery delays.

Incentive

A factor, often a form of reward or penalty, that motivates individuals to perform an action or behave in a certain manner.

Fewer Suppliers

A procurement strategy where a company intentionally reduces the number of suppliers in its supply chain to improve efficiency and negotiate better terms.