The Effects of Inventory Errors

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Which of these is NOT a likely cause of an inventory error?

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1. _____ is usually made to address any inventory error found.

2. What happens to profits if you overestimate the amount of inventory you had at the beginning of a period?

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About This Quiz & Worksheet

Assess your knowledge of inventory errors using the quiz/worksheet combo. You will need to know why these errors happen and ways of fixing them for the quiz.

Quiz & Worksheet Goals

The quiz is effective at gauging your knowledge of these topics:

  • Causes of inventory errors
  • When an error doesn't have to be recorded on the balance sheet for that accounting period
  • Consequences of underestimating the amount of inventory at the beginning of a period
  • How customers can cause inventory errors

Skills Practiced

  • Information recall - access the knowledge you have gained regarding the consequences of overestimating and underestimating the amount of inventory at the beginning of a period
  • Knowledge application - use your knowledge to answer questions about why inventory errors happen
  • Interpreting information - verify that you can read information regarding customers causing inventory errors and interpret it correctly

Additional Learning

The lesson called The Effects of Inventory Errors can help you learn more about these problems. Using the lesson, you can cover these objectives effectively:

  • Define inventory error
  • Compare and contrast overstated profits and understated profits
  • Identify the cons of inventory errors
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