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

question 125

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 not have on fiscal 2017 financial reporting?

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

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Definitions:

Bicuspid Valve

Another term for the mitral valve, located between the left atrium and left ventricle of the heart; it has two flaps (cusps).

Aortic Semilunar Valve

A valve in the heart between the left ventricle and the aorta that prevents blood from flowing back into the ventricle.

Pulmonary Trunk

A major blood vessel that exits the right ventricle of the heart, dividing into the left and right pulmonary arteries to carry deoxygenated blood to the lungs.

Abdominal Aorta

The main artery that runs down the abdomen, supplying oxygenated blood to the abdominal and pelvic organs and the legs.