The Accountant for Ella Company Made the Following Errors Related

question 61

Multiple Choice

The accountant for Ella Company made the following errors related to the inventory in 2014: 1.The beginning inventory for 2014 was understated by $1,350 due to an error in the physical count.
2.A $1,500 purchase of merchandise on credit was not recorded or included in ending inventory.
Assuming a periodic inventory system, Ella Company's 2014 net income will be

• A) understated by $150
• B) overstated by $1,350
• C) overstated by $1,500
• D) overstated by $2,850

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Definitions:

Decision Cycle

The process through which choices are identified, considered, and acted upon in a cyclical manner.

Crowdsourcing

The practice of obtaining needed services, ideas, or content by soliciting contributions from a large group of people, especially from the online community.

Outsourcing

The business practice of hiring external parties to perform services or create goods that traditionally were performed in-house by the company's own employees and staff.

Decision Making

The act of making a decision among various options through mental processes.