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

question 59

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 2012 financial reporting?

• A)Beginning inventory is understated by $1,000.
• B)Gross margin is understated by $1,000.
• C)Cost of sales is understated by $1,000.
• D)Inventory is overstated on the balance sheet.

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Definitions:

Rumination

The process of continuously thinking about the same thoughts, which are often sad or dark, without reaching any resolution.

Stress

A physical, mental, or emotional strain or tension resulting from adverse or very demanding circumstances.

Depression

A mental health disorder characterized by persistently depressed mood or loss of interest in activities, causing significant impairment in daily life.

Anxiety

An emotion characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure, often in response to perceived stress.