Risers Inc

question 129

Multiple Choice

Risers Inc. reported total assets of $1,800,000 and net income of $240,000 for the current year. Risers determined that inventory was overstated by $18,000 at the beginning of the year (this was not corrected) . What is the corrected amount for total assets and net income for the year?

• A) $1,800,000 and $240,000.
• B) $1,800,000 and $258,000.
• C) $1,782,000 and $222,000.
• D) $1,818,000 and $258,000.

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Definitions:

Unadjusted Trial Balance

A preliminary report listing all the accounts and their balances from the general ledger before any adjusting entries are made to prepare financial statements.

Contra Asset Account

An account on a company's balance sheet that reduces the total amount of the company's asset accounts.

Fixed Asset Accounts

Accounts used in accounting to track the purchase, depreciation, and disposal of fixed assets, which are long-term tangible assets.

Current Ratio

A financial ratio that measures a company's ability to cover its short-term liabilities with its short-term assets, calculated as current assets divided by current liabilities.