Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

question 128

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2019, but the inventory was excluded in error during the ending inventory count. What impact will this have on fiscal 2020 financial reporting?

• A)Gross margin is understated by $1,000.
• B)Cost of sales is overstated by $1,000.
• C)Ending inventory is understated by $1,000.
• D)Beginning inventory is understated by $1,000.

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Definitions:

Naming Species

The process of systematically identifying and classifying organisms into groups based on shared characteristics, following a standard set of rules.

Lumping

The practice in taxonomy of grouping together several previously separate species into one broader category.

Obsidian

A naturally occurring volcanic glass, used by ancient people for making sharp tools and ornaments.

Blades

Thin, flat pieces of metal or other hard materials, sharpened on one edge, used as tools or weapons.