Ending Inventory for the Year Ended December 31, 2011, Is

question 12

Multiple Choice

Ending inventory for the year ended December 31, 2011, is understated by $8,000. How will this error affect net income for 2012?

• A) Net income will be understated by $16,000.
• B) Net income will be overstated by $16,000.
• C) Net income will be understated by $8,000.
• D) Net income will be overstated by $8,000.

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Definitions:

Football Field

A playing surface, typically measuring 100 yards (91.44 meters) long and 53.3 yards (48.77 meters) wide, used for American football games.

Gallons

A unit of fluid volume measurement used in the US and the British imperial system, equal to 3.785 liters in the US.

Water Table

The upper surface of the saturated zone in an unconfined aquifer, below which the ground is fully saturated with water.

Saturated Zone

The area in the subsurface where water fills nearly all the pore spaces.