Assume That a $400 Purchase Invoice Received Close to Year-End

question 154

Multiple Choice

Assume that a $400 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 2013 financial reporting?

• A)Cost of sales is overstated by $400.
• B)Gross margin is overstated.
• C)Cost of goods available for sale is understated.
• D)There is no effect on fiscal 2013.

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Definitions:

Biomedical Therapy

Prescribed medications or procedures that act directly on the person’s physiology.

Family Therapy

Therapy that treats people in the context of their family system. Views an individual’s unwanted behaviors as influenced by, or directed at, other family members.

Repressed Thoughts

Unconscious defense mechanisms that involuntarily push threatening or conflict-ridden thoughts and feelings out of conscious awareness.

Psychoanalytic Techniques

Methods developed by Freud and his successors to explore the unconscious mind, such as free association, dream analysis, and transference.