If Ending Inventory Is Understated in 2014, the 2015 Ending

question 98

Multiple Choice

If ending inventory is understated in 2014, the 2015 ending owner's equity will be

• A) understated.
• B) overstated.
• C) correct.
• D) Owner's equity is never affected by an inventory error.

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Definitions:

Balance

The difference between the total credits and total debits in an account, or the state of having equal weight or power.

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The process of identifying a disease or condition from its symptoms and tests.

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A speedy yet temporary solution to a problem, often implemented as an immediate but not long-term resolution.