If,at the End of a Period,Michaels Company Erroneously Excluded Some

question 7

Multiple Choice

If,at the end of a period,Michaels Company erroneously excluded some goods from its ending inventory and also erroneously did NOT record the purchase of these goods in its accounting records,these errors would cause

• A) no effect on the company's net income,working capital,and retained earnings.
• B) the company's cost of goods available for sale,cost of goods sold,and net income to be understated.
• C) the company's ending inventory,cost of goods available for sale,and retained earnings to be understated.
• D) the company's ending inventory,cost of goods sold,and retained earnings to be understated.

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Definitions:

Congress

The legislative assembly in the United States, incorporating the Senate and the House of Representatives as its two divisions.

Downsizing

The process of reducing the size of a company by eliminating staff positions, often to improve efficiency or reduce costs.

Cash Crop

A crop produced primarily for sale rather than for the farmer's own use, often generating significant income for farmers and economies, examples include tobacco, cotton, and sugar cane.

General Stores

Local retail establishments that carry a wide variety of goods including food, clothing, and household items, particularly relevant in rural areas of the 19th and early 20th centuries.