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

question 61

Multiple Choice

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

• A)Retained earnings is overstated by $1,000.
• B)No effect on inventory value on the balance sheet.
• C)No effect on retained earnings.
• D)Inventory is understated on the balance sheet.

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Definitions:

Sampling Distribution

A statistical distribution of all possible samples that can be taken from a given population.

Standard Deviation

A quantification of how much the numbers in a collection diverge from their average, reflecting the spread of data.

Sample Observations

Individual data points collected from a subset of a larger population for the purpose of statistical analysis.

Probability

A measure of the likelihood that an event will occur, expressed as a number between 0 and 1.