Which of the Following Errors Will Normally Result in Overstatement

question 62

Multiple Choice

Which of the following errors will normally result in overstatement of 2015 net income?

• A) failure to record merchandise purchases in 2014
• B) understatement of 2014 ending merchandise inventory
• C) failure to record accrued salaries expense in 2014
• D) overstatement of prepaid expense in 2014

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Definitions:

Tax Management

The practice of strategically planning and executing financial matters to minimize tax liabilities and maximize tax benefits.

Financial Accounting

The branch of accounting that focuses on reporting a company's financial information to external users, such as investors and creditors.

Data Processing

The collection and manipulation of data to produce meaningful information.

Cost Accounting

An accounting method focused on capturing a company's total costs of production by assessing both fixed and variable costs.