The Understatement of the Beginning Inventory Balance Causes

question 49

Multiple Choice

The understatement of the beginning inventory balance causes:

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

Fat Cells

Also known as adipocytes, these cells store energy in the form of fat and play an important role in energy balance.

Drive Theory

A theory in psychology that posits that behavior is motivated by drives that arise from biological needs that demand satisfaction.

Homeostasis

The ability of a living organism to maintain internal stability by adjusting its physiological processes.

Drive-Reduction

A theory of motivation that posits that behavior is driven by the need to reduce internal states of tension caused by unmet biological needs.