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

question 89

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 NOT have on fiscal 2020 financial reporting?

• A)Beginning inventory is understated by $1,000.
• B)Gross margin is overstated by $1,000.
• C)Cost of sales is understated by $1,000.
• D)Inventory is understated on the balance sheet.

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Definitions:

Free Will

The concept that humans have the capability to make choices unconstrained by certain factors, essentially the ability to act at one's own discretion.

Duress

A situation where a person performs an act as a result of violence, threat, or other pressure against them, questioning the voluntariness of their actions.

Fraudulent Misrepresentations

False statements made knowingly, or without belief in their truth, or recklessly without caring for their truth, which are intended to induce another party to enter into a contract.

International Business

The exchange of goods, services, technology, capital, and/or knowledge across national borders and at a global or transnational life.