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:

Dissenting Viewpoints

Diverse or opposing perspectives typically in a debate or discussion indicating disagreement with the mainstream or common understanding.

Cultural Diversity

Refers to the presence of varied cultural, ethnic, and racial backgrounds within a community or organization, often seen as a source of innovation and growth.

Demographic Trends

Changes and patterns in the composition of a population over time, including age, race, employment, and education levels.

Globalization

The process by which businesses or other organizations develop international influence or start operating on an international scale, leading to increased interconnectedness.