If a Company Mistakenly Counts More Items During a Physical

question 136

Multiple Choice

If a company mistakenly counts more items during a physical inventory than actually exist, how will the error affect their bottom line?

• A) No change to net income.
• B) Net income will be overstated
• C) Net income will be understated.
• D) Only gross profit will be affected.

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Definitions:

Labeling Theory

A concept in sociology that suggests the identity and behavior of individuals may be influenced by the terms used to describe or classify them.

Powerful Effects

Significant impacts or changes brought about by an action, policy, or phenomenon on a society or environment.

Shared Value System

A set of principles and beliefs that are commonly accepted and practiced by a group of people.

Deviant Identity

The definition a person has of himself or herself as a deviant.