If a Company Misclassifies a General,selling and Administrative Cost as a Product

question 67

Multiple Choice

If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:

• A) net income will be overstated.
• B) total assets will be understated.
• C) gross margin will be understated.
• D) both net income will be overstated and gross margin will be understated

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Definitions:

Arteries

Blood vessels that carry oxygenated blood away from the heart to the body's tissues, except for the pulmonary arteries, which carry deoxygenated blood to the lungs.

Veins

Blood vessels that carry blood towards the heart, typically carrying deoxygenated blood, except for the pulmonary and umbilical veins.

Sympathetic Nerve Fibers

Part of the autonomic nervous system that prepares the body for stress-related activities.

Tunica Media

The middle layer of the wall of a blood vessel or hollow organ, composed mostly of smooth muscle and elastic fibers, responsible for regulating the diameter of the vessel.