Biases

question 46

Multiple Choice

Biases:

• A) Are issues about which managers have doubts
• B) Do not impact accounting information, which is highly objective and reliable
• C) Are preconceived notions developed without careful thought
• D) Are rarely a problem in business decision making

---

Definitions:

Inventory-related Selling Costs

These are expenses directly tied to the selling of inventory, including packaging, shipping, and handling costs.

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.

Stockholders' Equity

Stockholders' equity, or shareholders' equity, represents the residual interest in the assets of a corporation after deducting liabilities, essentially the net worth attributed to shareholders.

Overstatement

The action of stating or estimating a quantity or value more highly than is justified by the available evidence.