An Overstatement of Ending Inventory Will Cause

question 4

Multiple Choice

An overstatement of ending inventory will cause

• A) An overstatement of assets and equity on the balance sheet.
• B) An understatement of assets and equity on the balance sheet.
• C) An overstatement of assets and an understatement of equity on the balance sheet.
• D) An understatement of assets and an overstatement of equity on the balance sheet.
• E) No effect on the balance sheet.

---

Definitions:

Histogram

A graphical representation of the distribution of numerical data, often used to visualize the frequency of data points in consecutive intervals.

Three-dimensional Pie Chart

A graphical representation of data in the form of a three-dimensional circle divided into sectors, illustrating proportional relationships in a dataset.

Sales

The transactions or activities involved in selling goods or services in exchange for money or other compensation.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.