Question: Item 1 A $ 2 5 , 0 0 0 overstatement of the 2 0 2 2 ending inventory was discovered after the financial statements

Item 1
A $25,000 overstatement of the 2022 ending inventory was discovered after the financial statements for 2022 were prepared. Which of the following describes the effect of the inventory error on the 2022 financial statements?
Multiple Choice
Current assets were overstated and net income was understated.
Current assets were understated and net income was understated.
Current assets were overstated and net income was overstated.
Current assets were understated and net income was overstated.

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