The Errors Listed Below Occurred in 20x3 but Were Not

question 68

Multiple Choice

The errors listed below occurred in 20x3 but were not discovered until much later in 20x4 The accounting period ends December 31. What net effect did these errors have on 20x3 pre-tax income?

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

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Definitions:

Drug Addiction

A chronic, relapsing disorder characterized by compulsive drug seeking, continued use despite harmful consequences, and long-lasting changes in the brain.

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A legal process whereby a marriage can be dissolved without needing to establish wrongdoing by either party.

Divorce Law

The body of law dealing with the dissolution of marriage, including the division of assets, custody of children, and alimony.