The Sales Manager of Sebastian Company Failed to Record a Valid

question 59

Multiple Choice

The sales manager of Sebastian Company failed to record a valid sale on account of merchandise that had been shipped to a customer prior to the end of the current year; however, the company uses a periodic method of accounting for inventory and the merchandise had been properly excluded from inventory at the end of the current year.As a result of this error, Sebastian Company's

• A)total assets are overstated for the current year.
• B)total expenses are understated for the current year.
• C)net income is overstated for the current year.
• D)total assets are understated at the end of the current year.
• E)none of the above.

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Definitions:

Ethical Choice

A decision-making process that involves evaluating and selecting among alternatives based on moral principles and values.

Generational Influences

The impact that the values, behaviors, and communication styles of one generation have on society or workplaces.

Values

Core beliefs or standards that guide behavior and decision-making, reflecting what is important to an individual or group.

Cultural Differences

The diverse customs, beliefs, practices, and social behaviors that distinguish various human societies and groups.