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

question 82

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 2016 financial reporting?

• A)Beginning inventory is understated by $1,000.
• B)Gross margin is understated by $1,000.
• C)Cost of sales is understated by $1,000.
• D)Inventory is overstated on the balance sheet.

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Definitions:

Stored Information

Data or knowledge kept in the brain or another storage system, which can be retrieved when necessary.

Memory Recall

The process by which information is retrieved from past memories or learned data.

Miller

Refers to George A. Miller, a psychologist known for his work on the magical number seven, plus or minus two, related to the limits of human memory capacity.

Iconic Memory

A type of visual sensory memory that holds a brief replica of visual scenes for a very short duration before fading or being processed further.