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

question 60

Multiple Choice

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

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

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Definitions:

Standard Normal Distribution

A probability distribution with a mean of 0 and a standard deviation of 1, often used in statistical analysis.

Standard Deviation Units

Units of measurement derived from the standard deviation, used to quantify the variation or dispersion of a set of data points.

Bell-Shaped

Describes the graphical representation of a normal distribution, where most values cluster around a central peak and the distribution tapers off symmetrically towards both tails.

Standard Normal Distribution

A distribution of probability that displays symmetry around its mean, highlighting that instances near the mean happen more often than those far from it.