If a Company Overstates Its Ending Inventory Balance for 2017

question 76

Short Answer

If a company overstates its ending inventory balance for 2017 by $10,000, and understates its ending inventory balance for 2016 by $5,000 what are the effects on its net income for 2017 and 2016? ​ $\begin{array}{cc}\text { Effect on } 2017 \text { Net Income } & \text { Effect on } 2016 \text { Net Income } \\\hline \text { a. Understated by } \$ 5,000 & \text { Overstated by } \$ 10,000 \\\text { b. Overstated by } \$ 15,000 & \text { Understated by } \$ 10,000 \\\text { c. Overstated by } \$ 15,000 & \text { Understated by } \$ 5,000 \\\text { d. Overstated by } \$ 10,000 & \text { Understated by } \$ 5,000\end{array}$

Understand and apply the principles of combinations and permutations to determine the number of possible groups, selections, or orderings.

Understand the concept of sample spaces and how to calculate the number of sample points for various experiments.

Comprehend the foundational concepts of probability, including the calculation of event probabilities, joint, marginal, and conditional probabilities.

Understand and analyze the concept of independent, mutually exclusive, and complementary events and their impact on probability calculations.

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Definitions:

Inferior Vena Cava

The large vein that carries deoxygenated blood from the lower and middle body into the right atrium of the heart.

Pulmonary Artery

The blood vessel that transports blood lacking oxygen from the heart's right ventricle to the lungs to receive oxygen.

Left Ventricle

The chamber within the heart that pumps oxygenated blood out into the systemic circulation throughout the body.

Nervous System

A complex network of nerves and cells that transmits signals between different parts of the body.