Which Statement Is Correct About Inventory Errors

question 40

Multiple Choice

Which statement is correct about inventory errors?

• A)Misstatements in inventory usually affect two reporting periods.
• B)Misstatements in inventory usually affect only the current accounting period.
• C)Misstatements in inventory usually affect only beginning inventory amounts.
• D)Misstatements in inventory usually affect only ending inventory amounts.

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Definitions:

Accounts Payable

Money owed by a business to its suppliers shown as a liability on the company's balance sheet.

Expenses Paid

Funds that have been disbursed to cover the costs incurred by a business or individual.

Payment of Liability

The process of discharging obligations or debts by transferring assets, typically cash, to the creditor or lender.

Purchase of Asset

The act of acquiring a tangible or intangible resource that is expected to provide benefits to a business over multiple periods.