Elizabeth Company Discovered the Following Errors in 2010: Ending Inventory $\$ 2,000$

question 42

Multiple Choice

Elizabeth Company discovered the following errors in 2010: Ending inventory at December 31,2009 , was understated by $\$ 2,000$ .
Accrued expenses of $\$ 3,000$ were not recorded at December 31,2009 Elizabeth reported net income of $35, 000 for the year 2009.The corrected net income (ignoring income taxes) for 2009 should be

• A)$40, 000
• B)$30, 000
• C)$36, 000
• D)$34, 000

---

Definitions:

Outstanding Voting

Refers to the shares of a corporation that are issued and held by shareholders, including those with voting rights.

Consolidated Revenues

The total revenues recognized from all sources, including subsidiaries, by a parent company during a reporting period, after the elimination of any inter-company transactions.

Inventory Purchase Price

The amount paid to acquire inventory before any discounts or allowances.

Outstanding Voting

Refers to shares of a corporation that are currently owned by investors and have voting rights at shareholder meetings.