In preparing its financial statements for the current year, a company's closing inventory was understated by...
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• In preparing its financial statements for the current year, a company's closing inventory was understated by $300,000. • What will be the effect of this error if it remains uncorrected? • A The current year's profit will be overstated and next year's profit will be understated. • B The current year's profit will be understated but there will be no effect on next year's profit. •C The current year's profit will be understated and next year's profit will be overstated. •D The current year's profit will be overstated but there will be no effect on next year's profit. • In preparing its financial statements for the current year, a company's closing inventory was understated by $300,000. • What will be the effect of this error if it remains uncorrected? • A The current year's profit will be overstated and next year's profit will be understated. • B The current year's profit will be understated but there will be no effect on next year's profit. •C The current year's profit will be understated and next year's profit will be overstated. •D The current year's profit will be overstated but there will be no effect on next year's profit.
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Answer rating: 100% (QA)
The correct option is C The current years net profit will be understated and next years profits ... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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