A $15,000 Overstatement of the 20B Ending Inventory Was Discovered

question 23

Multiple Choice

A $15,000 overstatement of the 20B ending inventory was discovered after the financial statements for 20B were prepared.What was the effect of the inventory error on the 20B financial statements?

• A)Current assets were overstated and profit was understated.
• B)Current assets were understated and profit was understated.
• C)Current assets were understated and profit was overstated.
• D)Current assets were overstated and profit was overstated.

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Definitions:

Normal Color Vision

The ability to perceive colors accurately and differentiate between them, based on normal functioning of the cone cells in the retina.

Critical Period

A specific time in development during which an organism is particularly sensitive to environmental influences, outside of which such learning is significantly more difficult or even impossible.

Sensory Restriction

The limitation of normal sensory input, such as sight or hearing, which can lead to changes in perception or psychological state.

Cataracts

A common eye condition where the lens becomes progressively opaque, leading to blurred vision and, in severe cases, blindness if left untreated.