Prunedale Co

question 106

Multiple Choice

Prunedale Co. uses a periodic inventory system. Beginning inventory on January 1 was overstated by $32,000, and its ending inventory on December 31 was understated by $62,000. These errors were not discovered until the next year. As a result, Prunedale's cost of goods sold for this year was:

• A) Overstated by $94,000.
• B) Overstated by $30,000.
• C) Understated by $94,000.
• D) Understated by $30,000.

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Definitions:

Interference Theory

The view that we may forget stored material because other learning interferes with it.

Serial-position Effect

A cognitive phenomenon where people tend to remember the first and last items in a series best, and the middle items worst.

Retrospective Memory

Memory for past events, activities, and learning experiences, as shown by explicit (episodic and semantic) and implicit memories.

Repetition

The act of doing or saying something over and over again to retain or improve the skill or memory.