The Work-In-Process Ending Inventory Was Understated

question 31

Multiple Choice

The work-in-process ending inventory was understated.This error will cause:

• A)the cost of goods manufactured to be overstated.
• B)the cost of goods sold to be overstated.
• C)the net income to be understated.
• D)all of the above to happen.

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Definitions:

Net Income

The net income of a business, which is obtained by deducting all costs and taxes from its total revenue.

Physical Count

The actual tallying of inventory goods a company has on hand to verify stock levels and assess the need for adjustment in accounting records.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Cost Of Goods Sold

Expenses directly tied to the production process of goods a company markets.