If the Beginning Inventory for 2014 Is Overstated, the Effects

question 6

Multiple Choice

If the beginning inventory for 2014 is overstated, the effects of this error on cost of goods sold for 2014, net income for 2014, and assets at December 31, 2015, respectively, are

• A) overstatement, understatement, overstatement.
• B) overstatement, understatement, no effect.
• C) understatement, overstatement, overstatement.
• D) understatement, overstatement, no effect.