Suppose that ABC overstates its ending inventory for 2018. What effect will this have on the reported amount of cost of goods sold for 2018?
A. Cannot be determined given the information provided.
B. Have no effect on cost of goods sold.
C. Understate cost of goods sold.
D. Overstate cost of goods sold.
The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:_______
A) A debit to an asset.
B) A debit to a liability.
C) A credit to a liability.
D) A credit to an asset.
Sales revenue $350,000
Accounts receivable $280,000
Ending inventory $230,000
Cost of goods sold $180,000
Sales returns $50,000
Sales discount $20,000
Given the information in the above table, what is the company's gross profit?
A) $100,000.
B) $50,000.
C) $170,000.
D) $280,000.
If your employer declares bankruptcy, this can have a major effect on your pension if you are in a
A) Either plan
B) Defined Benefit Plan
C) Neither Plan
D) Defined Contribution Plan

Cost of goods sold = beginning inventory + purchases during the period - ending inventory. If ending inventory is overstated, then COGS are understated.

The adjusting entry required when amounts previously recorded as deferred revenues are earned by providing goods or services to customers includes:_______

B) A debit to a liability.

Deferred revenues are liabilities with credit balances, therefore, when they are actually earned, they must decrease with a debit.

Sales revenue $350,000

Accounts receivable $280,000

Ending inventory $230,000

Cost of goods sold $180,000

Sales returns $50,000

Sales discount $20,000

Given the information in the above table, what is the company's gross profit?

A) $100,000.

Gross profit = net sales revenue - COGS

net sales revenue = total sales revenue - sales returns - sales discounts

If your employer declares bankruptcy, this can have a major effect on your pension if you are in a

C) Neither Plan

All types of pension plans are currently protected and only a small portion of very high income plans are affected in case of bankruptcy (generally plans that hold over $1 million or those plans with contributions higher than $54,000 per year).