In 2015,beginning Inventory Is Overstated

question 106

Multiple Choice

In 2015,beginning inventory is overstated.What is the effect of the error on total stockholders' equity in 2016?

• A)total stockholders' equity is overstated in 2016
• B)total stockholders' equity is understated in 2016
• C)total stockholders' equity is correctly stated in 2016
• D)none of the above

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Definitions:

Lessor

The owner of a property or asset who leases it out to another party, known as the lessee, under a rental agreement.

Involuntary Bailment

A situation where an individual unintentionally comes into possession of someone else's property and has a legal duty to take care of it.

Bailor

The owner giving up possession of property in a bailment.

Bailee

The person acquiring possession of personal property in a bailment.