Assume That a $100 Purchase Invoice Received Close to Year-End

question 138

Multiple Choice

Assume that a $100 purchase invoice received close to year-end is not recorded in fiscal 2016,but the inventory is appropriately included in the ending inventory count.What impact will this have on fiscal 2016 financial reporting?

• A)Cost of sales is understated by $100.
• B)Gross margin is understated.
• C)Sales are understated by $100.
• D)Operating profit is understated by $100.

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Definitions:

Constructive Dismissal

A situation where an employee resigns due to an employer's behavior that effectively forces them out, typically because of making their working conditions intolerable.

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A condition or position that is regarded as being of lower importance, value, or prestige compared to others.

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The total collection of wages, benefits, bonuses, and other financial incentives offered to employees by an employer.

Alberta Energy

The sector of the economy in Alberta, Canada, focused on the extraction, production, and distribution of energy resources like oil and gas.