There is an error in computing ending inventory in Year 1. Which statement is TRUE?

Question 10 options:

A)	The total gross profit for Year 1 and Year 2 combined will be correct.

B)	Gross profit will continue to be incorrect until an adjusting entry is made.

C)	The error will have no effect on Year 2 financial statements.

D)	After three years, the inventory error will counterbalance.

Which of the following is a CORRECT statement about the lower-of-cost-or market rule when applied to inventories?

Question 15 options:

A)	Under U.S. GAAP, once inventory has been written down to market value, the write-downs can be reversed in future periods.

B)	Currently, the lower-of-cost-or-market rules are the same for both U.S. GAAP and IFRS.

C)	Under U.S. GAAP, the lower-of-cost-or-market rule is optional.

D)	Under IFRS, some lower-of-cost-or-market write-downs may be reversed.