Assume That Ending Inventory in Fiscal 2016 Is Overstated by $1,000.What

question 49

Multiple Choice

Assume that ending inventory in fiscal 2016 is overstated by $1,000.What impact will this have on fiscal 2017 financial reporting?

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

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Definitions:

Cervix

The lower part of the uterus in the female reproductive system, connecting the uterine cavity with the vagina.

Lanugo

Soft, fine hair that covers the fetus during early development, which is usually shed before birth.

Vernix Caseosa

A white creamy substance that covers the skin of the fetus during pregnancy, providing protection.

Fetoscopy

A medical procedure involving the insertion of a fetoscope to visually examine a fetus inside the uterus.