Merchandise Inventory at the End of the Year Was Understated

question 144

Multiple Choice

Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?

• A) net income is understated
• B) net income is overstated
• C) cost of merchandise sold is understated
• D) merchandise inventory reported on the balance sheet is overstated

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Definitions:

Affective Evaluation

The process of assessing something based on feelings, emotions, or moods associated with the experience or expectation of it, rather than objective or rational assessment.

Attitudes

A psychological tendency expressed by evaluating a particular entity with some degree of favor or disfavor, shaping how individuals think and behave.

Concert Tours

A series of live music performances by an artist or band traveling to different locations over a specific period.

Relationship Management

Relationship management involves strategies and practices for maintaining and enhancing relationships with clients, colleagues, and other stakeholders.