Use the Following Information for the Following Questions:
Giselle

question 96

Multiple Choice

Use the following information for the following questions:
Giselle Ltd. is a calendar-year corporation. Its financial statements for the years 2020 and 2019 contained errors as follows:
$$\begin{array} { l l l } &2020&2019\\\text { Ending inventory } & \$ 2,000 \text { overstated } & \$ 3,000 \text { overtated } \\\text { Depreciation expense } & \$ 6,000 \text { understated } & \$ 12,000 \text { overstated }\end{array}$$
-Assume that the proper correcting entries were made at December 31, 2019. By how much will 2020 pre-tax income be overstated or understated?

• A) $2,000 understated
• B) $2,000 overstated
• C) $6,000 overstated
• D) $8,000 overstated

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Definitions:

Black Female

A term used to describe individuals who identify as female and are of Black or African descent, recognizing both their gender and racial identity.

Black Male

A term referring to individuals who identify as male and are of Black or African descent.

Res Ipsa Loquitur

A legal doctrine meaning "the thing speaks for itself," used when the cause of an injury is obviously due to negligence.

Trial Court

A court in which most civil or criminal cases start when they first enter the legal system. The parties present evidence and call witnesses to testify. Trial courts are referred to as courts of common pleas or county courts in state court systems and as district courts in the federal system. Also called court of original jurisdiction and court of first instance.