An Error in the Ending Inventory for the Year Ended

question 2

Multiple Choice

An error in the ending inventory for the year ended December 31,2019:

• A)automatically creates errors in cost of goods sold in the 2019 and 2020 financial statements.
• B)has no effect on the 2019 financial statements,but will create an error in the 2020 financial statements.
• C)automatically creates errors in the ending inventory balance in the 2019 and 2020 financial statements.
• D)affects only the 2019 financial statements.

---

Definitions:

Output

The quantity of goods or services produced in a certain period of time by a person, machine, or industry.

Price Taker

A market participant who has no influence over the market price and must accept the prevailing market price for its products or services.

Price Maker

An entity, typically a firm, with enough market power to influence or set the price of its product or service rather than taking the market price as given.