During the Taking of Its Physical Inventory on December 31

question 78

Multiple Choice

During the taking of its physical inventory on December 31, 2014, Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000. The effect on the balance sheet and income statement would be as follows:

• A) assets overstated by $70,000;retained earnings understated by $70,000; net income statement understated by $70,000.
• B) assets overstated by $70,000;retained earnings understated by $70,000; no effect on the income statement.
• C) assets and retained earnings overstated by $70,000; net income overstated by $70,000.
• D) assets and retained earnings overstated by $70,000; net income understated by $70,000.

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Definitions:

Perseverance

Persistent effort and determination in doing something despite difficulties or delay in achieving success.

Time Management

The process of organizing and planning how to divide one's time between specific activities to increase efficiency and productivity.

Setting Priorities

The process of determining the most important tasks or goals to focus on, often to ensure efficient use of time and resources.

Grouping Tasks

The process of organizing tasks into categories or clusters for more efficient completion and to improve focus and productivity.