After Issuing Its Financial Statements, a Company Discovered That Its

question 30

Multiple Choice

After issuing its financial statements, a company discovered that its beginning inventory was overstated by $100,000. Its tax rate is 30%. As a result of this error, net income was:

• A)Understated by $70,000.
• B)Overstated by $70,000.
• C)Understated by $30,000.
• D)Overstated by $30,000.If beginning inventory is overstated, COGS is overstated and net income is understated: $100,000 (1 30%) = $70,000.

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Definitions:

Median

The median is the middle value of a sorted list of numbers, dividing the dataset into two equal halves, where half the numbers are lower and half are higher than the median.

Skewed

Describes a distribution of data that is not symmetrical, leaning towards one side, either to the left or right, often indicating a deviation from the norm.

Midterm Test Scores

The grades or marks that students receive on examinations conducted halfway through an academic term.

Median

The middle value in a data set, which divides the set into two equal halves.