Merchandise Inventory at the End of the Year Is Overstated

question 9

Multiple Choice

Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?

• A) owner's equity is overstated
• B) cost of merchandise sold is overstated
• C) gross profit is understated
• D) net income is understated

Understand the legal and ethical considerations in accessing and managing patient information.

Recognize the impact of digital tools and systems in enhancing healthcare delivery and evidence-based practice.

Identify strategies for solving human problems using knowledge and informatics in healthcare.

Understand the structure and essential components of routine and positive business messages.

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Definitions:

Direct Materials

Raw materials that can be directly attributed to the production of a product.

Cotton

A natural fiber and a key agricultural commodity used primarily in the textile industry for making fabrics.

Internal Auditing

The independent, objective assurance and consulting activity designed to add value and improve an organization's operations, focusing on internal controls and business processes.

Administrative Expense

Costs related to the general management and administration of an organization, such as salaries of executives and office supplies.