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NEW QUESTION: 1
Which statement(s) is/are true?
I). Merchandise shipped FOB destination is actually owned by the seller until the goods reach the receiving dock of the buyer.
II). If the ending inventory of the business is understated, the net income for the period will be understated and the retained earnings for the period will be overstated.
III). If the ending inventory of the business is overstated, the net income for the period will be overstated and the net income for the following period will also be overstated.
IV). When the value of ending merchandise inventory is overstated, the net income of the subsequent year will be understated by the amount of the overstatement.
A. I and III.
B. II and III.
C. I and IV.
Answer: C
Explanation:
I). However, merchandise shipped 'FOB shipping point' becomes the property of the buyer as soon as the goods leave the shipping point of the seller.
II). If the ending inventory is understated, cost of goods sold will be overstated and the net income for the same period will be understated. The retained earnings however, will be understated, because understated net income for the period will be closed to the Retained Earnings account to the Retained
Earnings account.
III). When ending inventory is overstated, the net income of the period will also be overstated. With ending inventory becoming the beginning inventory of the subsequent period, the error will cause the net income of the following period to be understated.
IV). The overstated ending inventory will become the beginning inventory of the subsequent year, overstating the cost of merchandise available for sale and the cost of goods sold of the subsequent year, and understating net income.

NEW QUESTION: 2
Did the value of the house grow this year?
(1) If the neighborhood becomes more crowded the value of the house drops.
(2) This year the neighborhood has gotten less crowded yet a new railway was built nearby.
A. Statements (1) and (2) TAKEN TOGETHER are NOT sufficient to answer the question, requiring more data pertaining to the problem.
B. Statement (2) BY ITSELF is sufficient to answer the question, but statement (1) by itself is not.
C. Statement (1) BY ITSELF is sufficient to answer the question, but statement (2) by itself is not.
D. Either statement BY ITSELF is sufficient to answer the question.
E. Statements (1) and (2) TAKEN TOGETHER are sufficient to answer the question, even though NEITHER statement BY ITSELF is sufficient.
Answer: E
Explanation:
Explanation/Reference:
Explanation:
Statement (1) gives a casual link between the value of the house and the neighborhood, yet no data on the neighborhood was given in this statement. Statement (2) tells us that the neighborhood has gotten less crowded and so the value of the house grew. Statement (2) also tells us about a new railway that was built nearby but no link has been given to us about the connection between the value of the house and the rails.
Both statements, taken together are sufficient.

NEW QUESTION: 3

A. Option C
B. Option D
C. Option B
D. Option A
Answer: C