If a Company Overstates Its Ending Inventory Balance for 2012

question 217

Multiple Choice

If a company overstates its ending inventory balance for 2012 by $10,000,and understates its ending inventory balance for 2011 by $5,000 what are the effects on its net income for 2012 and 2011? Effect on 2012 Net Income Effect on 2011 Net Income

• A)Overstated by $15,000 Understated by $10,000
• B)Understated by $5,000 Overstated by $10,000
• C)Overstated by $15,000 Understated by $5,000
• D)Overstated by $10,000 Understated by$5,000

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Definitions:

Nerve Synapses

The junctions between neurons that allow for the transmission of electrical or chemical signals from one neuron to another.

Genetic Predisposition

The increased likelihood of developing a particular disease or trait based on a person's genetic makeup, inherited from their parents.

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The process of becoming infected with a disease, often through the spread of pathogens from one individual to another.

Secondary Aging

The aging process that results from disease and poor health practices rather than from the passage of time (primary aging) or genetic influences.