Assume That Ending Inventory in Fiscal 2019 Is Overstated by $1,000.What

question 67

Multiple Choice

Assume that ending inventory in fiscal 2019 is overstated by $1,000.What impact will this have on fiscal 2019 financial reporting?

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

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Definitions:

Dram Shop Statutes

Laws that hold alcohol-serving establishments liable for serving alcohol to visibly intoxicated persons or minors who subsequently cause harm.

Emergency Services

Public or private organizations that provide assistance and protect the public during emergencies, such as fire, medical, and law enforcement services.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, resulting in unintended harm to another party.

Tort Law

A section of law that deals with civil wrongs, providing remedies for individuals harmed by the wrongful actions of others.