As a Result of Understating Ending Inventory by $10,000 at the End

question 78

Multiple Choice

As a result of understating ending inventory by $10,000 at the end of Year 1:

• A)net income for Year 2 will be understated.
• B)net income for Year 2 will be overstated.
• C)ending inventory for Year 2 will be overstated.
• D)there will be no effect on net income for Year 2.

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Definitions:

Bilateral Tolerances

Tolerances that allow variation both above and below the specified dimension.

Unilateral Tolerances

Tolerances that allow variation in only one direction (either positive or negative) from the specified dimension.

Surface Profile

A description or measurement of the surface features of an object, detailing its texture, flatness, and variations.

Three Dimensions

Describes an object or space with measurable length, width, and height, providing a sense of depth or volume.