Inventory at the End of the Year Was Inadvertently Overstated

question 68

Multiple Choice

Inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and stockholders' equity?

• A) net income is overstated, assets are overstated, and stockholders' equity is understated
• B) net income is overstated, assets are overstated, and stockholders' equity is overstated
• C) net income is understated, assets are understated, and stockholders' equity is understated
• D) net income is understated, assets are understated, and stockholders' equity is overstated

Determine the methods to explore the relationship between different variables.

Understand the concept and importance of correlation between variables.

Identify appropriate graphical representations for various types of data.

Comprehend transformations to achieve linearity in relationships between variables.

---

Definitions:

Long Lead Items

Materials, equipment, or components that have a long delivery time, potentially impacting the project schedule.

Equipment

The necessary items for a particular purpose, often referring to tools or machinery needed for an operation or activity.

Materials

The physical substances or components needed for something, especially those used for construction or manufacturing.

Time And Materials Contract

A contract agreement where payment is based on the actual labor hours worked and materials used.