A Broadcasting Company Failed to Make a Year-End Accrual of $400,000

question 138

Multiple Choice

A broadcasting company failed to make a year-end accrual of $400,000 for fines due to a violation of FCC rules. Its tax rate is 30%. As a result of this error, net income was:

• A) Unaffected.
• B) Overstated by $400,000.
• C) Overstated by $280,000.
• D) Overstated by $120,000.

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