A $15,000 Overstatement of the Current Year's Ending Inventory Was

question 75

Multiple Choice

A $15,000 overstatement of the current year's ending inventory was discovered after the financial statements for the year were prepared.How would that inventory error impact the current year's financial statements?

• A) Current assets were overstated and net income was understated.
• B) Current assets were understated and net income was understated.
• C) Current assets were overstated and net income was overstated.
• D) Current assets were understated and net income was overstated.

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Definitions:

Subliminal Perception

The process by which stimuli are perceived or absorbed without conscious awareness, potentially influencing attitudes or behaviors.

Conscious Awareness

The state of being aware of one's own existence, sensations, thoughts, surroundings, etc., typically through cognitive processes.

Stimulus

Anything that can elicit a physical or behavioral response in an organism.

Weber's Law

A principle in psychology that states the smallest noticeable difference in stimulus intensity is proportional to the intensity of the original stimulus, making it a relative measure rather than an absolute one.