If,at the End of a Period,Michaels Company Erroneously Excluded Some

question 7

Multiple Choice

If,at the end of a period,Michaels Company erroneously excluded some goods from its ending inventory and also erroneously did NOT record the purchase of these goods in its accounting records,these errors would cause

• A) no effect on the company's net income,working capital,and retained earnings.
• B) the company's cost of goods available for sale,cost of goods sold,and net income to be understated.
• C) the company's ending inventory,cost of goods available for sale,and retained earnings to be understated.
• D) the company's ending inventory,cost of goods sold,and retained earnings to be understated.

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Definitions:

Stock Prices

The cost of a share of a company as traded on the stock market, representing the market's valuation of the company.

Excess Supply of Money

A situation where the quantity of money available in the economy surpasses the demand for it, potentially leading to inflation.

Interest Rates

The cost of borrowing money, expressed as a percentage of the total amount of the loan, usually on an annual basis.

Investment

The allocation of resources, typically money, in order to gain profitable returns, as interest, income, or appreciation in value.