Which of These Is Not a Possible Source of Error

question 2

Multiple Choice

Which of these is not a possible source of error in calculating closing inventory?

• A) An incorrect cut-off between accounting periods.
• B) Mistakes in counting during the stocktake.
• C) Mistakes in the price at which the goods are sold to customers.
• D) Mistakes in dealing with goods on consignment.

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Definitions:

Cost of Goods Sold

Expenses specifically associated with the production of a company's sold products, such as materials and labor.

Ending Inventory

The total value of a company's merchandise, raw materials, and finished and unfinished products which have not yet been sold, at the end of an accounting period.

Inventory Unit Costs

The cost associated with a single unit of inventory, taking into account all costs of acquisition, production, and other direct costs.

Inventory Turnover

A financial ratio that shows how many times a company's inventory is sold and replaced over a specific period.