Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

question 136

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2012, but the inventory was excluded in error during the ending inventory count. What impact will this have on fiscal 2013 financial reporting?

• A)Gross margin is understated by $1,000.
• B)Cost of goods available for sale is overstated by $1,000.
• C)Cost of sales is understated by $1,000.
• D)Beginning inventory is overstated by $1,000.

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Definitions:

Alveolar Process

The part of the jawbone that holds the teeth, providing support and promoting the health and stability of the teeth.

Atlas

The first cervical vertebra of the spine, supporting the globe of the head.

Sacrum

A large, triangular bone at the base of the spine that forms by the fusion of vertebrae, uniting with the pelvis.

Joint Cavity

The space between the articulating surfaces of bones in a synovial joint, filled with synovial fluid that lubricates the joint.