Newsman Co

question 34

Multiple Choice

Newsman Co.made the following errors in counting its year-end physical inventories: As a result of the above undetected errors,2014 income was

• A) understated by $18,000.
• B) overstated by $198,000.
• C) overstated by $18,000.
• D) understated by $198,000.

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Definitions:

Project Value

The estimated financial value of a project, taking into account all potential revenues, costs, and risks involved.

Mutually Exclusive

Situations or options that cannot occur or be chosen at the same time; selecting one excludes the possibility of selecting the other.

Investment Decisions

The process of deciding where to allocate and commit financial and capital resources to optimize returns.

Cash Flow

The overall quantity of cash exchange happening in and out of a business, profoundly impacting its liquidity ratio.