Ending Inventory for the Current Year Is Overstated by $20

question 61

Multiple Choice

Ending inventory for the current year is overstated by $20 000.What effect will this error have on the following year's Net profit?

• A)Net profit will be understated by $40 000.
• B)The inventory overstatement will not affect Net profit.
• C)Net profit will be understated by $20 000.
• D)Net profit will be overstated by $20 000.

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