Merchandise Inventory at the End of the Year Was Inadvertently

question 49

Multiple Choice

Merchandise inventory at the end of the year was inadvertently overstated.Which of the following statements correctly states the effect of the error on net income,assets,and stockholders' equity?

• A)net income is overstated,assets are overstated,and stockholders' equity is understated
• B)net income is overstated,assets are overstated,and stockholders' equity is overstated
• C)net income is understated,assets are understated,and stockholders' equity is understated
• D)net income is understated,assets are understated,and stockholders' equity is overstated

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Definitions:

Nickel

A hard, malleable, and ductile metallic element, primarily used in alloys and as a catalyst.

Epoxy

A class of synthetic thermosetting polymers used in adhesives, coatings, and composite materials, known for strong adhesive and mechanical properties.

Thermoplastic

A type of plastic material that becomes moldable at a certain elevated temperature and solidifies upon cooling.

Round

A geometric shape without corners, typically circular in nature.