If a Company Understates Its Count of Ending Inventory in Year

question 9

Multiple Choice

If a company understates its count of ending inventory in Year 1,which of the following is true?

• A)Costs of good sold is understated at the end of Year 1.
• B)Profit is correct in Year 2.
• C)The balance of retained earnings is overstated at the end of Year 1.
• D)The balance of retained earnings is correct at the end of Year 2.

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Definitions:

Hasty Decisions

Quick judgments or choices made without thorough consideration, often leading to suboptimal outcomes.

Polarization

The process or phenomenon where a group or society gets divided into sharply contrasting opinions or beliefs.

Mental Agenda

A mental agenda refers to the set of priorities, tasks, or objectives that an individual plans to accomplish, often reflecting their personal or professional goals.

Objective Strategies

Planned actions or approaches aimed at achieving specific goals based on factual analysis.