If a Company Understates Its Count of Ending Inventory in Year

question 98

Multiple Choice

If a company understates its count of ending inventory in Year 1,which of the following is true?

• A)Costs of goods sold is understated at the end of Year 1.
• B)Profit is correct in Year 2.
• C)The balance of retained earnings is overstated at the end of Year 1.
• D)The balance of retained earnings is correct at the end of Year 2.

Understand the regulatory environment and its impact on financial reporting, including SEC requirements.

Grasp the importance of liquidity, solvency, and profitability ratios in evaluating a company's financial position.

Recognize the applications and benefits of using Extensible Business Reporting Language (XBRL) in financial reporting.

Understand the importance of accurate and timely financial information in decision making.

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Definitions:

Positive Symptoms

Symptoms present in some mental health disorders that are an excess or distortion of normal functions, such as hallucinations or delusions.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli which have qualities of real perceptions.

Paranoia

A mental condition characterized by delusions of persecution, unwarranted jealousy, or exaggerated self-importance, typically elaborated into an organized system.

Fluid-Filled Areas

Regions within the body or an organ that contain liquid, often playing a role in various biological functions.