What Is the Effect of the Error on Berkshire's 2013

question 114

Multiple Choice

What is the effect of the error on Berkshire's 2013 income statement?

• A)Net income is understated by $420,000.
• B)Cost of goods sold is understated by $420,000.
• C)There are no errors in the 2013 income statement.
• D)None of the above is correct.

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Definitions:

Equilibrium Price

The price at which supply and demand for a product or service balance, leading to an stable market condition.

Supply Declines

A situation where the quantity of a good or service that producers are willing to sell at a given price decreases.

Demand Rises

An increase in the quantity of a product or service that consumers are willing and able to purchase at a given price level.

Given Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded by consumers at various price levels.