In 2017, Beginning Inventory Is Overstated

question 78

Multiple Choice

In 2017, beginning inventory is overstated. What is the effect of the error on net income in 2017 and 2018?

• A)Net income is overstated in 2017 and 2018.
• B)Net income is understated in 2017 and 2018.
• C)Net income is understated in 2017 and overstated in 2018.
• D)Net income is understated in 2017 and correctly stated in 2018.

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Definitions:

University Of Minnesota

A public research university located in the Twin Cities of Minneapolis and St. Paul, Minnesota, known for its education and research programs.

Foreign Tax Credit

A non-refundable tax credit for individuals who have paid taxes to foreign countries, aiming to reduce double taxation on the same income.

Foreign Income Taxes

Taxes imposed by a foreign government on income earned within its jurisdiction by non-resident individuals or entities.

U.S. Tax Liability

The total amount of tax owed to the United States government by an individual or entity for a given tax year.