(CMA Adapted, Jun 96 #3) an Item of Inventory Purchased

question 51

Multiple Choice

(CMA adapted, Jun 96 #3) An item of inventory purchased in Year 5 for $25.00 has been incorrectly written down to a current replacement cost of $17.50.The item is currently selling in Year 6 for $50.00, its normal selling price.Which one of the following statements is correct?

• A)The income for Year 5 is overstated.
• B)The cost of sales for Year 6 will be overstated.
• C)The income for Year 6 will be overstated.
• D)The closing inventory of Year 5 is overstated.
• E)none of the above

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Definitions:

Hearing Loss

A decrease in the ability to perceive sounds compared to what is considered normal.

Preventable

Capable of being stopped or avoided through proactive measures or actions.

Cortisol

A steroid hormone produced by the adrenal glands, involved in stress responses, metabolism, and immune function.

Diabetes

A chronic health condition where the body is unable to properly process glucose, leading to elevated blood sugar levels.