If Overhead Is Miscalculated So That It Is Underabsorbed,the Result

question 33

Multiple Choice

If overhead is miscalculated so that it is underabsorbed,the result if the error is not corrected will be that

• A)Inventory will be understated and net income will be overstated.
• B)Inventory and net income will be overstated.
• C)Inventory will be overstated and net income will be understated.
• D)Inventory and net income will be understated.

---

Definitions:

Financial Account

A component of a country's balance of payments that records transactions of foreign investment and domestic investments abroad.

Capital Account

A national account that shows the net change in asset ownership for a country, including transactions like foreign investments and loans.

Financial Account

A component of a country's balance of payments that records all transactions for investment in foreign assets and liabilities.

Current Account

Part of a country's balance of payments, including the trade balance, net income from abroad, and net current transfers, reflecting the difference between a nation's savings and its investment.