Assume That a $1,000 Purchase Invoice Received Close to Year-End

question 3

Multiple Choice

Assume that a $1,000 purchase invoice received close to year-end is not recorded in fiscal 2019, but the inventory is appropriately included in the ending inventory count. What impact will this have on fiscal 2019 financial reporting?

• A)Purchases are overstated.
• B)Purchases are understated.
• C)Gross margin is understated.
• D)Cost of sales is overstated.

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Definitions:

Developmental Stages

Specific phases through which an individual passes as they grow and mature, each characterized by distinct psychological or physical attributes.

Joan Erikson

A psychologist who collaborated extensively with her husband, Erik Erikson, contributing to the field of human development, particularly regarding the stages of psychosocial development.

Adolescence

Stage of life commonly defined as the onset of puberty when sexual maturity or the ability to reproduce is attained.

Middle-Age

A period in a person's life typically ranging from about 45 to 65 years old, characterized by transitions in physical, emotional, and social aspects.