There Is an Error in Computing Ending Inventory in Year

question 117

Multiple Choice

There is an error in computing ending inventory in Year 1. Therefore:

• A) the error will have no effect on Year 2 financial statements.
• B) after three years, the inventory error will counterbalance.
• C) gross profit will continue to be incorrect until an adjusting entry is made.
• D) the total gross profit for Year 1 and Year 2 combined will be correct.

Understand the requirements for reporting the liabilities of operating segments under various accounting standards.

Calculate and prepare proportionately adjusted balance sheets for joint operations.

Understand the factors that influence the definition and creation of news.

Recognize the diversity of practices and conventions in media work.

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Definitions:

Financial Year

A financial year is a 12-month period used for calculating annual financial statements in businesses and other organizations.

Capital

Financial assets or resources that individuals or companies use to fund their operations and invest in their growth.

Tax Deduction

An expense that can be subtracted from gross income to reduce the taxable income, resulting in lower taxes owed.

Legally Guaranteed

Ensured or secured by law; having legal promise or assurance.