Use the Following Information for Questions 92 Through 94

question 28

Multiple Choice

Use the following information for questions 92 through 94.
Hudson, Inc. is a calendar-year corporation. Its financial statements for the years 2015 and 2014 contained errors as follows:
-Assume that no correcting entries were made at December 31, 2014. Ignoring income taxes, by how much will retained earnings at December 31, 2015 be overstated or understated?

• A) $ 2,000 understated
• B) $15,000 overstated
• C) $15,000 understated
• D) $18,000 understated

---

Definitions:

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or touched.

Conservation

In cognitive development, the understanding that certain properties of objects, such as volume or mass, remain the same despite changes in the forms or arrangements of those objects.

Culture and Society

The collective beliefs, values, norms, and material objects shared by a group of people and passed from one generation to the next, shaping their way of life.

Cognitive Growth

The intellectual development that occurs as we learn, understand, and apply knowledge over time.