A Company Failed to Report the $600,000 Additional Liability for Its

question 105

Multiple Choice

A company failed to report the $600,000 additional liability for its underfunded pension plan.Its tax rate is 30%.As result of this error,retained earnings would be:

• A)Unaffected.
• B)Overstated by $600,000.
• C)Overstated by $420,000.
• D)Overstated by $180,000.

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Definitions:

Demand Curve

The demand curve is a graphical representation showing how the quantity demanded of a good or service varies with its price, typically sloping downward from left to right.

Excise Tax

A tax imposed on the sale of specific goods or services, such as alcohol, cigarettes, and gasoline.

SUVs

Sport Utility Vehicles, a category of motor vehicles that combine elements of road-going passenger cars with features from off-road vehicles, like increased ground clearance and all-wheel drive.

Excise Tax

A tax charged on specific goods, services, and activities, often included in the price of the product.