In 2017, Ending Inventory Is Overstated

question 15

Multiple Choice

In 2017, ending inventory is overstated. What is the effect of the error on total stockholders' equity in 2017 and 2018?

• A)Total stockholders' equity is overstated in 2017 and 2018.
• B)Total stockholders' equity is understated in 2017 and 2018.
• C)Total stockholders' equity is overstated in 2017 and correctly stated at the end of 2018.
• D)Total stockholders' equity is overstated in 2017 and understated in 2018.

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Definitions:

Observational Learning

The process of gaining knowledge by watching others' actions and the results of those actions.

Immediate Reinforcement

The provision of a reward or punishment immediately following a behavior, which increases the likelihood of that behavior being repeated in the future.

Spiderman

A fictional superhero character created by Marvel Comics, known for his spider-like abilities and swinging across cityscapes using webs.

Modeling

The process of observing and imitating a specific behavior.