Use the Following Information for Questions Through

question 435

Multiple Choice

Use the following information for questions through. Giselle Ltd.is a calendar-year corporation.Its financial statements for the years 2015 and 2014 contained errors as follows:
-Assume that the proper correcting entries were made at December 31, 2014.By how much will 2015 pre-tax income be overstated or understated?

• A)$2,000 understated
• B)$2,000 overstated
• C)$6,000 overstated
• D)$8,000 overstated

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Definitions:

Quarterly

Occurring every three months or constituting one-fourth of a year.

Compounded Semi-Annually

Interest is calculated and added to the principal twice a year.

Monthly Payments

Recurring payments made once per month, often in the context of loan repayments or subscriptions.

Compounded Annually

Interest calculation method where interest is added to the principal at the end of each year, enabling interest to be earned on interest in the following year.