Newcastle Company Has the Following Inventory Data for the Current

question 60

Multiple Choice

Newcastle Company has the following inventory data for the current period: Assume that the ending inventory is understated by $5,000.What is the effect on the current period's net income?

• A)It will be overstated by $5,000.
• B)It will be understated by $5,000.
• C)It will be understated by $20,000.
• D)The inventory error will have no effect on net income.

---

Definitions:

Assign Tasks

The process of allocating specific duties or responsibilities to individuals or teams within an organization.

Nonfinancial Performance

Measures of an organization's success not directly related to financial gains, such as customer satisfaction, employee engagement, and environmental impact.

GAAP or IFRS

Standards and principles that provide the framework for financial accounting and reporting, with GAAP used in the United States and IFRS internationally.

Objectivity and Verifiability

Accounting principles emphasizing the importance of unbiased financial information and the ability to confirm the accuracy of this data.