Use This Information to Answer the Following Question

question 63

Multiple Choice

Use this information to answer the following question. In addition,beginning merchandise inventory was $11,000 and ending merchandise inventory was $7,000.
If beginning and ending merchandise inventories were ignored in computing net income,then net income would be

• A)understated by $11,000.
• B)overstated by $4,000.
• C)understated by $7,000.
• D)understated by $4,000.

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Definitions:

New-product Development

The process of designing, creating, and bringing a new product to market to meet consumer demand or exploit a new opportunity.

Generate Sales

The act of creating revenue through the selling of goods or services to customers.

Defective

Refers to a flaw or imperfection in a product that impairs its usability for the purpose for which it was designed or manufactured.

Revamped Product

A product that has new packaging, different features, and updated designs and functions.