JP Corporation Had Net Income of $1,000,000 for 2011

question 139

Multiple Choice

JP Corporation had net income of $1,000,000 for 2011. After issuing its financial statements, it realized that it had failed to include inventory from one of its small warehouses for several years. Specifically, it forgot to include $20,000 on December 31, 2010, and $30,000 on December 31, 2011. Which of the following is true regarding JPs 2011 net income?

• A)Net income was understated by $10,000.
• B)Net income was overstated by $10,000.
• C)Net income was understated by $30,000.
• D)Net income was overstated by $30,000.

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Definitions:

Brainstorming

A group creativity technique designed to generate a large number of ideas for the solution of a problem.

Creative Thinking

The process of thinking in novel ways to generate new and innovative ideas or solutions.

Decision Making

The process of selecting a course of action from multiple alternatives, often involving judgment, evaluation, and the consideration of possible outcomes.

Group Decisions

Decisions made by a collective of individuals, often benefiting from diverse opinions and shared responsibility.