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

question 28

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)No effect on cost of goods available for sale.
• C)Cost of sales is understated by $1,000.
• D)Beginning inventory is overstated by $1,000.

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Definitions:

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