Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

question 137

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2016,but the inventory was excluded in error during the ending inventory count.What impact will this have on fiscal 2017 financial reporting?

• A)Gross margin is understated by $1,000.
• B)Cost of sales is overstated by $1,000.
• C)Ending inventory is not affected by the prior year inventory counting error.
• D)Beginning inventory is overstated by $1,000.

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Definitions:

Ethnomethodological

Relates to a sociological method that studies the ways people make sense of their everyday lives.

Conversational Analysis

A methodology in sociolinguistics and sociology that studies the structure and patterns of conversation to understand social interactions.

Positive Responses

Positive Responses are affirmative reactions or feedback to stimuli, interactions, or situations, suggesting agreement, approval, or pleasure.

Ethnomethodological

Pertaining to the study of the methods people use in everyday life to create a sense of social order and understand their world.