The Ending Merchandise Inventory for the Current Accounting Period Is

question 49

Multiple Choice

The ending merchandise inventory for the current accounting period is overstated by $3,500. What will be the effect of this error?

• A)Net income for the current accounting period will be overstated by $3,500.
• B)Cost of goods sold for the current accounting period will be overstated by $3,500.
• C)Ending merchandise inventory for the next accounting period will be overstated by $3,500.
• D)Cost of goods sold for the next accounting period will be understated by $3,500.

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Definitions:

Price-Fixing

An illegal agreement among competitors to raise, lower, or stabilize prices or competitive terms, which interferes with free-market competition.

Sherman Act

A foundational United States antitrust law enacted in 1890 to prevent anti-competitive practices, monopolies, and to promote fair competition for the benefit of consumers.

Securities Regulation

The body of laws and rules governing securities, including issuing, trading, and disclosures to protect investors and ensure fair markets.

Foreign Markets

Markets outside a company's home country where it conducts or seeks to conduct business.