If Ending Inventory Is Overstated in 2017, and No Further

question 47

Multiple Choice

If ending inventory is overstated in 2017, and no further errors are made in 2018, then profit will be

• A) overstated in 2017 and understated in 2018.
• B) understated in 2017 and overstated in 2018.
• C) overstated in both 2017 and 2018.
• D) overstated in 2017 and correct in 2018.

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Definitions:

Product Price

The amount of money charged for a good or service in the market.

Purchases Increase

A rise in the quantity of goods or services bought over a specific period of time.

Price Change

A variation in the cost of a good or service over time, influenced by factors like supply, demand, and inflation.

More Elastic

Describes a situation where the demand or supply for a good or service is highly responsive to changes in price.