The Understatement of the Ending Inventory Balance Causes

question 21

Multiple Choice

The understatement of the ending inventory balance causes:

• A) Cost of goods sold to be overstated and net income to be understated.
• B) Cost of goods sold to be overstated and net income to be overstated.
• C) Cost of goods sold to be understated and net income to be understated.
• D) Cost of goods sold to be understated and net income to be overstated.
• E) Cost of goods sold to be overstated and net income to be correct.

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Definitions:

Cognition

The cognitive activity of gaining insight and comprehension via thinking, experiencing, and sensory perception.

Emotions

Complex psychological states that involve physiological arousal, expressive behaviors, and conscious experience.

Intelligence Quotient

A measure of a person's cognitive ability or intelligence, represented as a score derived from standardized tests.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors.