C Good Eyeglasses Overstated Its Inventory by $30,000 at the End

question 90

Multiple Choice

C. Good Eyeglasses overstated its inventory by $30,000 at the end of 2018. If the error is not discovered until 2020, before adjusting or closing entries, C. Good would need:

• A) An increase in 2020 retained earnings.
• B) A debit to inventory of $30,000 in 2020.
• C) A prospective adjustment in the 2019 income statement.
• D) None of these answer choices are correct.

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Definitions:

Right of Way

The legal right, established by usage or granted by authority, to pass along a specific route through grounds or property owned by another.

Power Line

Electrical transmission and distribution cables that carry electricity from power plants to end users.

Recognizable Interest

An interest in property or a transaction that is legally identifiable and protectable.

Tenants in Common

A form of co-ownership where each tenant holds an undivided interest in property, but without right of survivorship.