A $25,000 Overstatement of the 2019 Ending Inventory Was Discovered

question 13

Multiple Choice

A $25,000 overstatement of the 2019 ending inventory was discovered after the financial statements for 2019 were prepared.Which of the following describes the effect of the inventory error on the 2019 financial statements?

• A)Current assets were overstated and net income was understated.
• B)Current assets were understated and net income was understated.
• C)Current assets were overstated and net income was overstated.
• D)Current assets were understated and net income was overstated.

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Definitions:

Turn Of The Century

The transition from one century to the next; often used to specify the period around the 19th to 20th centuries, characterized by significant social and technological changes.

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Characterized by unconventional or odd behavior, interests, or habits.

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Urban areas that are characterized by developed infrastructure, technological advancements, and diverse populations.

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Urban areas that were designed or evolved to be navigable primarily by foot, before the widespread use of automobiles.