Assume That a Purchase Invoice for $1,000 Was Appropriately Recorded

Multiple Choice

Assume that a purchase invoice for $1,000 was appropriately recorded in fiscal 2012, but the inventory was excluded in error during the ending inventory count. What impact will this have on fiscal 2013 financial reporting?

A) Gross margin is understated by $1,000.
B) Cost of goods available for sale is understated by $1,000.
C) Cost of sales is overstated by $1,000.
D) Beginning inventory is overstated by $1,000.