Poppy Co Uses a Periodic Inventory System

question 88

Multiple Choice

Poppy Co. uses a periodic inventory system. Beginning inventory on January 1 was understated by $30,000, and its ending inventory on December 31 was understated by $17,000. In addition, a purchase of merchandise costing $20,000 was incorrectly recorded as a $2,000 purchase. None of these errors were discovered until the next year. As a result, Poppy's cost of goods sold for this year was:

• A) Overstated by $31,000.
• B) Overstated by $5,000.
• C) Understated by $31,000.
• D) Understated by $48,000.

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Definitions:

Physical Symptoms

Observable or measurable signs of an illness or disorder, manifesting in the body rather than the mind.

Tolerance

Tolerance is the capacity to accept or endure differences, opinions, or behavior without adverse reaction.

Marijuana

A psychoactive drug derived from the Cannabis plant, used for recreational or medicinal purposes.

Inhalations

The act of taking air or gas into the lungs through breathing.