If Reported Profits Are Reduced by $5,000 in Year One

question 47

Multiple Choice

If reported profits are reduced by $5,000 in year one because of the operation of conservatism:

• A) profits in later years will be unaffected.
• B) profits in later years must be $5,000 higher.
• C) profits in later years will be $5,000 lower.
• D) none of the above.