David Gordon Is an Accountant for Bronte Ltd B) C)

question 15

Multiple Choice

David Gordon is an accountant for Bronte Ltd.At the end of the year he realised that ending inventory was overstated but the purchases account was recorded correctly.What is the effect of correcting the above error in the statement of comprehensive income and statement of financial position (inventory) accounts of Bronte Ltd?

• A)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Increase } \\
• \hline
• \end{array}\]
• B)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Increase } \\
• \hline
• \end{array}\]
• C)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Decrease } & \text { Decrease } \\
• \hline
• \end{array}\]
• D)
• \[\begin{array} { | c | c | }
• \hline \begin{array} { c }
• \text { Statement of } \\
• \text { comprehensive income }
• \end{array} & \begin{array} { c }
• \text { Statement of financial } \\
• \text { position (inventory) }
• \end{array} \\
• \hline \text { Increase } & \text { Decrease } \\
• \hline
• \end{array}\]

---

Definitions:

Critical Value

The threshold value that a test statistic must exceed to reject the null hypothesis in a statistical test, determined by the significance level of the test.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, often denoted by alpha (α) and typically set at 0.05, 0.01, etc.

Sample Observation

An individual data point collected from a sample that is used for analysis and making inferences about the population.

Population Variance

A measure of the dispersion of all data points in a population from the population mean, indicating the diversity within the population.