If Ending Inventory on December 31,2014,is Overstated by $40,000,what Is

question 37

Multiple Choice

If ending inventory on December 31,2014,is overstated by $40,000,what is the effect on net income for 2015?

• A) Net income is overstated by $40,000.
• B) Net income is understated by $40,000.
• C) Net income is overstated by $80,000.
• D) The answer cannot be determined from the information given.

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Definitions:

Quality Standards

Preset criteria that products, services, or processes must meet to ensure they are fit for their purpose and meet customer or regulatory requirements.

Tangible Product

A physical item that can be seen, touched, and possessed, in contrast to services or digital goods.

Subjective

Pertains to or is influenced by personal feelings, tastes, or opinions.

Operations Management Decision

Strategic and tactical decisions involved in overseeing the production and distribution processes of goods and services, aiming to maximize efficiency and meet consumer demand.