The Following Accounting Errors Occurred in 20x3, but Were Not

question 85

Multiple Choice

The following accounting errors occurred in 20x3, but were not discovered until 20x4: Purchases for 20x3 overstated by = $400 Ending 20x3 inventory overstated by = $400
Depreciation expense for 20x3 overstated by = $400
The combined effect of these three errors caused 20x3 pre-tax income to be:

• A)Overstated by $800.
• B)Understated by $1,200.
• C)Understated by $400.
• D)Overstated by $400.

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