Which of the Following Will Cause Net Income to Be

question 120

Multiple Choice

Which of the following will cause net income to be overstated for the following year?

• A)Current year's ending inventory is understated.
• B)Current year's ending inventory is overstated.
• C)Next year's beginning inventory is overstated.
• D)Next year's ending inventory is understated.

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Definitions:

Assets

Resources owned by a company that have economic value and can contribute to future income.

General Ledger

The primary accounting record of a company that uses double-entry bookkeeping, containing all the financial accounts and transactions of a business.

Accounts

Records summarizing all transactions related to a particular item over a period.

Posting

The process of transferring entries from the journal to the respective accounts in the ledger.