The Ending Merchandise Inventory for the Current Year Is Overstated

question 77

Multiple Choice

The ending merchandise inventory for the current year is overstated by $20,000. What effect will this error have on the following year's net income?

• A) The net income will be overstated by $40,000.
• B) The net income will be overstated by $20,000.
• C) The net income will be understated by $20,000.
• D) The net income will be understated by $40,000.

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Definitions:

Iodomethane

An organoiodine compound with the chemical formula CH3I, used in various chemical reactions.

Reaction Rate

The rate at which substances change into different substances in a chemical process.

Resonance Structures

Different Lewis structures that represent the same molecule, showing the delocalization of electrons.

Intermediate

An intermediate in chemistry is a transient species within a chemical reaction that is formed from the reactants and proceeds to form the final product.