Cornwall Co

question 13

Multiple Choice

Cornwall Co.made the following errors in counting its year-end physical inventories: The entry to correct the accounts at the end of 2014 is

• A) Retained Earnings ...................48,000 Cost of Goods Sold ..................42,000 Inventory ........................90,000
• B) Retained Earnings ...................18,000 Cost of Goods Sold ..................72,000 Inventory ........................90,000
• C) Inventory ..........................90,000 Cost of Goods Sold ...............18,000 Retained Earnings ...............72,000
• D) Cost of Goods Sold ..................198,000 Retained Earnings ................108,000 Inventory ........................90,000

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Definitions:

Single-Index Structure

A portfolio model that relates the returns on each asset to a single market index.

Sensitivity Coefficients

Measurements that indicate how much the output of a mathematical model or system can change in response to changes in its inputs.

Macroeconomic Factor

A variable or element that impacts the broader economy, including aspects like inflation, unemployment, monetary and fiscal policies.

Mean-Variance Efficient Portfolio

An investment portfolio constructed to offer the highest expected return for a given level of risk, or the lowest risk for a given level of expected return, based on mean-variance optimization.