Question: ABC Limited failed to include inventory in transit, shipped to its warehouse FOB shipping point, in the inventory amount reported on its 2022 statement of

ABC Limited failed to include inventory in transit, shipped to its warehouse FOB shipping point, in the inventory amount reported on its 2022 statement of financial position. What is the effect on its 2022 net income?

a. understated

b. overstated

c. no effect

d. cannot be determined without more information

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