Trent Department Store Uses a Perpetual Inventory System but Adjusts

question 89

Multiple Choice

Trent Department Store uses a perpetual inventory system but adjusts its inventory records at year-end to reflect the results of a complete physical inventory. In the physical inventory taken at the ends of 2010 and 2011, Trent's employees failed to count the merchandise in the store's window display. The cost of this merchandise amounted to $13,000 at the end of 2010, and $19,000 at the end of 2011. As a result of these errors, the cost of goods sold for 2005 will be:

• A) Understated by $19,000.
• B) Overstated by $6,000.
• C) Understated by $6,000.
• D) None of the above.

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Definitions:

Treatment Costs

The financial expenses associated with medical care, therapy, or intervention for health conditions.

Civil Commitment

The legal process by which individuals with severe mental illness are court-ordered into treatment or care.

Social Deviants

Individuals whose behavior diverges significantly from societal norms or expectations.

Institutionalized

Established in practice or custom, often referring to organizations or systems deeply embedded within society.