The Following Errors Were Discovered During January 20x3 (Prior to Any

question 131

Multiple Choice

The following errors were discovered during January 20x3 (prior to any reversing entries) The accounting period ends December 31. What effect did these errors have on the 20x2 pre-tax income?

• A)Understated by $1,000
• B)Understated by $2,000
• C)Overstated by $1,000
• D)Overstated by $2,000

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Definitions:

Section Height

The tread center-to-bead plane on a tire.

Section Width

The sidewall-to-sidewall measurement on a tire.

Aspect Ratio

A tire term calculated by dividing the section height by the section width.

Cracked Rim

A type of damage to the outer edge of a wheel where a crack has formed, potentially compromising the wheel's structural integrity.