Hollander Company Hired Some Students to Help Count Inventory During

question 48

Multiple Choice

Hollander Company hired some students to help count inventory during their semester break.Unfortunately,the students added incorrectly and the 2010 ending inventory was overstated by $5,000.What would be the effect of this error in ending inventory?

• A)2010 net income would be overstated.
• B)2010 net income would be understated.
• C)2010 ending retained earnings would be understated.
• D)2010 cost of goods sold would be overstated.

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Definitions:

Brand Equity

The value and strength of a brand that decides its worth and influences consumer choice.

Marketing Value

The perceived worth that a product or service brings to a consumer in comparison to its cost.

Financial Value

The monetary worth attributed to an asset, company, or financial instrument based on its ability to generate income or profits.

Harvesting Approach

A business strategy focusing on extracting maximum profits from a product, market, or investment with minimal reinvestment, often in the decline stage of its lifecycle.