An Overstatement of Beginning Inventory Results in

question 108

Multiple Choice

An overstatement of beginning inventory results in

• A)no effect on the period's gross margin.
• B)an overstatement of gross margin.
• C)an understatement of gross margin.
• D)a need to adjust purchases.

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Definitions:

Profitability Ratios

Financial metrics used to evaluate a company's ability to generate profit relative to its revenue, assets, equity, or other financial metrics.

Operating Income

The profit realized from a business's operations after subtracting operating expenses from gross income.