What Effect (If Any)would the Unrealized Profits in Ending Inventory

question 15

Multiple Choice

What effect (if any) would the unrealized profits in ending inventory have on income tax expense for 2009?

• A)They would cause a $1,600 reduction in income tax expense.
• B)They would cause a $1,200 reduction in income tax expense.
• C)They would cause a $1,600 increase in income tax expense.
• D)They would cause a $1,200 increase in income tax expense.

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Definitions:

Government

The system or group of people governing an organized community, often a state, and the institution through which societies are ruled and regulations are enforced.

Demand Curves

Graphs showing the relationship between the price of a good and the quantity of that good consumers are willing and able to purchase at various prices.

Courts Of Law

Institutions vested with the authority to adjudicate legal disputes, interpret laws, and administer justice through the application of legal rules and principles.

Marginal Cost

The expenditure involved in producing a further unit of a good or service.