Use the Following Information for Questions 92 Through 94

question 140

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, or December 31, 2015 and that no additional errors occurred in 2016. Ignoring income taxes, by how much will working capital at December 31, 2016 be overstated or understated?

• A) $0
• B) $ 4,000 overstated
• C) $ 4,000 understated
• D) $10,000 understated

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Definitions:

Confederate Government

The administration that governed the Confederate States of America, a collection of southern states that seceded from the United States from 1861 to 1865.

Social Divisions

Distinct categories within society that are differentiated by characteristics such as class, ethnicity, or religion, often leading to inequality or conflict.

European Intervention

Actions taken by European countries to influence the political, economic, or social affairs of other nations, often outside of Europe.

British Ship Trent

A British mail ship involved in the Trent Affair during the American Civil War, when it was stopped by the US Navy, leading to a diplomatic crisis.