McCartney Corp

question 47

Multiple Choice

McCartney Corp.reports on a calendar-year basis.Its 2013 and 2014 financial statements contained the following errors:

As a result of the above errors,2014 income would be

• A)overstated by $4,000.
• B)overstated by $24,000.
• C)overstated by $22,000.
• D)overstated by $16,000.

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Definitions:

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, based on estimated revenues, expenses, and capital expenditures.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads - in the cost of a product.

Full Costs

The complete cost of producing an item or providing a service, including direct, indirect, fixed, and variable costs.

Profitable

Describes a business or activity that generates more revenue than it spends in costs, resulting in a financial gain.