What Is the Effect of a $50,000 Overstatement of Last

question 23

Multiple Choice

What is the effect of a $50,000 overstatement of last year's inventory on current years ending retained earning balance?

• A) Understated by $50,000.
• B) No effect.
• C) Overstated by $50,000.
• D) Need more information to determine.

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Definitions:

Organic Solidarity

Unity based on role differentiation, not similarity.

Role Differentiation

The process by which members of a society or group develop specialized functions, responsibilities, or social statuses.

Collective Consciousness

The set of shared beliefs, ideas, and moral attitudes which operate as a unifying force within society.

Social Institutions

Complexes of norms, values, and roles that organize social activities into stable patterns and contribute towards meeting social needs, such as family, education, and government.