Ending Inventory for the Current Accounting Period Is Understated by $2,700.What

question 142

Multiple Choice

Ending inventory for the current accounting period is understated by $2,700.What effect will this error have on Cost of goods sold and Net income?

• A) \[\begin{array} { | c | c | }
• \hline \text { Cost of goods sold } & \text { Net income } \\
• \hline \text { Understated } & \text { Understated } \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | c | c | }
• \hline \text { Cost of goods sold } & \text { Net income } \\
• \hline \text { Overstated } & \text { Overstated } \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | c | c | }
• \hline \text { Cost of goods sold } & \text { Net income } \\
• \hline \text { Understated } & \text { Overstated } \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | c | c | }
• \hline \text { Cost of goods sold } & \text { Net income } \\
• \hline \text { Overstated } & \text { Understated } \\
• \hline
• \end{array}\]

Delineate the real costs associated with quality and their effect on an organization’s profitability.

Appreciate the importance of process capability analysis in assessing process performance.

Identify the relevance of supplier certification programs and their impact on quality and costs.

Understand lean management philosophy and its emphasis on waste reduction.

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