What Effect Will an Overstatement of Ending Inventory at the End

question 66

Multiple Choice

What effect will an overstatement of ending inventory at the end of Year 1 have on the amounts reported on the Year 1 financial statements?

• A)Overstatement of cost of goods sold
• B)Overstatement of total assets
• C)Understatement of net income
• D)Understatement of retained earnings

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Definitions:

Sensorimotor Stage

A stage in Piaget's theory of cognitive development, occurring from birth to about 2 years of age, where infants learn about the world through their senses and motor actions.

Piaget's Stage

Refers to one of the developmental phases in Piaget's theory of cognitive development, highlighting key milestones in a child's learning and understanding.

Preoperational

The second stage in Piaget's theory of cognitive development, characterized by symbolic thought and egocentrism, typically occurring from ages 2 to 7.

Male Systemizing Tendency

A theory suggesting that males are, on average, more inclined towards understanding and building systems, as opposed to empathizing.