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:

Interquartile Range

The range between the first and third quartiles in a data set, representing the middle 50% of values and used as a measure of variability.

Observations

Data points or recorded information obtained from experimental or study designs, representing individual examples of the variables being studied.

Median

The middle value in a list of numbers, which separates the higher half from the lower half.

First Quartile

The value below which 25% of the data falls in a data set, representing the median of the lower half of the dataset.