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

question 149

Multiple Choice

Assume that a $100 purchase invoice received close to year-end is not recorded in fiscal 2012, but the inventory is appropriately included in the ending inventory count. What impact will this have on fiscal 2012 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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