In 2015,beginning Inventory Is Overstated

question 13

Multiple Choice

In 2015,beginning inventory is overstated.What is the effect of the error on net income in 2015 and 2016?

• A)net income is overstated in 2015 and 2016
• B)net income is understated in 2015 and 2016
• C)net income is understated in 2015 and overstated in 2016
• D)net income is understated in 2015 and correctly stated in 2016

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Definitions:

Merocrine Secretion

A type of exocrine secretion where cells excrete their substances by exocytosis without losing any cellular material.

Phospholipid

Lipid with phosphorus, resulting in a molecule with a polar end and a nonpolar end; main component of the lipid bilayer.

Apocrine

A type of gland that secretes substances by breaking off a part of the cell; found in the skin and eyelids.

Compound Acinar

A type of glandular structure in which secretory cells form sac-like acini connected to ducts, found in some exocrine glands such as the pancreas and salivary glands.