In a Periodic Inventory System, If Ending Inventory Is Understated

question 153

Multiple Choice

In a periodic inventory system, if ending inventory is understated,

• A) net income is understated.
• B) working capital is overstated.
• C) the current ratio is overstated.
• D) cost of goods sold is understated.

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Definitions:

Summer

One of the four temperate seasons, characterized by the warmest temperatures of the year, typically occurring between spring and autumn.

Winter

The coldest season of the year, occurring between autumn and spring, characterized by lower temperatures and shorter days.

Lake Zone

A specific area or region within or around a lake, often characterized by unique ecological characteristics or management requirements.

Benthic Zone

The ecological region at the lowest level of a body of water such as an ocean or a lake, including the sediment surface and some sub-surface layers.