During Her First Year with the Company,Ann Mistakenly Accumulated Some

question 74

Multiple Choice

During her first year with the company,Ann mistakenly accumulated some of the company's period costs in ending inventory.Which of the following indicates how this error affects the company's financial statements assuming number of units produced exceeded number of units sold during the period?

• A) Cash flows from operations are understated.
• B) Gross margin is unaffected.
• C) Net income is overstated.
• D) Inventory is understated.

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Definitions:

Product Availability

The degree to which products are in stock and accessible to customers when they want to purchase them.

Manufacturing Cost

Refers to the total expenses involved in the production of goods, including raw materials, labor, and overhead costs.

VMI

Vendor-managed inventory, a supply chain practice where the supplier takes full responsibility for maintaining an agreed inventory level at the buyer's premises.

Inventory Level

The quantity of goods and materials on hand at any given time within a business, crucial for fulfilling customer orders and maintaining production flow.