Use This Information to Answer the Following Question In Addition,beginning Merchandise Inventory Was $22,000 and Ending Merchandise Inventory

question 124

Multiple Choice

Use this information to answer the following question. $\begin{array}{|l|r|r|}\hline \text { Account Name } & \text { Debit } & \text { Credit } \\\hline \text { Sales } & & 300,000 \\\text { Sales Returns and Allowances } & 10,000 & \\\text { Purchases } & 68,000 & \\\text { Purchases Returns and Allowances } & & 8,000 \\\text { Freight-In } & 12,000 & \\\text { Selling Expenses } & 30,000 & \\\text { General and Administrative Expenses } & 110,000 & \\\hline\end{array}$ In addition,beginning merchandise inventory was $22,000 and ending merchandise inventory was $14,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

• A) understated by $22,000.
• B) overstated by $8,000.
• C) understated by $14,000.
• D) understated by $8,000.

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Definitions:

Executive Office

A branch of government responsible for enforcing laws and managing the administration of public policy, typically headed by the President or Prime Minister.

President

The elected head of state and government in a republic, particularly referring to the President of the United States.

Agencies

Organizations or bodies established by the government to perform specific functions, often involved in administering policy and regulation in various areas.

Unitary Executive Theory

A concept in constitutional law that suggests the President possesses the power to control the entire executive branch fully.