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

question 100

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 goods available for sale is overstated by $1,000.
• C)Cost of sales is understated by $1,000.
• D)Beginning inventory is overstated by $1,000.

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Definitions:

Prejudge

To make a decision or form an opinion about something or someone before having all the relevant information or facts.

Quality

The degree to which a product, service, or process meets specified standards or fulfills customer expectations.

Proposal

A formal suggestion or plan put forward for consideration or discussion by others.

Proposal

A formal suggestion or plan, often detailed in a document, presented for consideration or action.