JP Corporation Had Net Income of $1,000,000 for 2020

question 55

Multiple Choice

JP Corporation had net income of $1,000,000 for 2020. After issuing its financial statements, the corporation realized that it had failed to include inventory from one of its small warehouses for two years. Specifically, it forgot to include $20,000 on December 31, 2019 and $30,000 on December 31, 2020. Which of the following is TRUE regarding JP's 2019 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:

Off-center

Describes something that is not positioned in the middle or is away from the central point or axis.

Bin-

A prefix used in various contexts to denote two, a pair, or a binary relationship.

Twice

Occurring two times; indicating the occurrence of something two times.

Eu-

A prefix meaning good, well, or true, often used in scientific and medical terms.