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

question 33

Multiple Choice

JP Corporation had net income of $1,000,000 for 2020. 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, 2019, and $30,000 on December 31, 2020. Which of the following is TRUE regarding JPs 2020 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:

Atlantic Coast

Refers to the eastern coastline of the United States, stretching from Maine in the north to Florida in the south, bordering the Atlantic Ocean.

Untouched Wilderness

Areas of natural land that remain in their pristine condition, undisturbed by human development or activity, often protected as national parks or wilderness areas.

European

Pertaining to Europe, its people, cultures, or nations.

Plantation Slavery

A system of agriculture in the Americas where large farms (plantations) used the forced labor of enslaved Africans and African Americans to produce crops like tobacco, sugar, and cotton.