Assume That Ending Inventory in Fiscal 2012 Is Overstated by $1,000.What

question 113

Multiple Choice

Assume that ending inventory in fiscal 2012 is overstated by $1,000.What impact will this have on fiscal 2013 financial reporting?

• A)Retained earnings is overstated by $1,000.
• B)No effect on inventory value on the balance sheet.
• C)Retained earnings is understated by $1,000.
• D)Inventory is understated on the balance sheet.

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Definitions:

ESOPs

An Employee Stock Ownership Plan, a program that provides a company's workforce with an ownership interest in the company.

Motivational Value

The inherent capacity of a stimulus, activity, or goal to evoke a motivational response or encourage sustained engagement and effort.

Fringe Benefit Systems

A collection of non-wage compensations provided to employees in addition to their normal wages or salaries.

Job Performance

The level of effectiveness and efficiency with which an individual fulfills their designated job roles and responsibilities.