An error understated Power Corporation’s December 31, 2018, ending inventory by$54,000. What effect will this error have on total assets and net income for 2018?Assets Net incomea. Understate Understateb. Understate No effectc. No effect Overstated. No effect No effect

An error understated Power Corporation’s December 31, 2018, ending inventory by$54,000. What effect will this error have on total assets and net income for 2018?Assets Net incomea. Understate Understateb. Understate No effectc. No effect Overstated. No effect No effect

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

An error understated Power Corporation’s December 31, 2018, ending inventory by
$54,000. What effect will this error have on total assets and net income for 2018?
Assets Net income
a. Understate Understate
b. Understate No effect
c. No effect Overstate
d. No effect No effect

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