If a Company Misclassifies a General,selling and Administrative Cost as a Product

question 89

Multiple Choice

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

• A) net income will be overstated.
• B) total assets will be understated.
• C) gross margin will be understated.
• D) Both net income will be overstated and gross margin will be understated.

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Definitions:

Armed

Being equipped with weapons, especially firearms, for defense, attack, or intimidation purposes.

Carefully Planned

Actions or tasks that are devised with consideration and forethought, often to achieve a specific goal or outcome efficiently.

Entirely Unplanned

Refers to events or actions that occur without any prior intention or preparation, often leading to spontaneous and unpredictable outcomes.

Over-Planned

A situation or activity that has been prepared with excessively detailed planning, potentially to the point of inefficiency.