XYZ Company’s inventory is overstated at December 31 of this year. The result will be

Question

A. Understated income this year.

B. Understated retained earnings this year.

C. Understated retained earnings next year.

D. Understated income next year

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN · Answer

Answer option D. Understated income next year

Lesley Lanag CMA CPA · Answer

D. Understated net income the following year.

Invty, end yr1 overstated = invty, beg yr2 overstated

Overstated beginning inventory results to overstated cost of sales and understated net income.

Mohammed Shahid Ullah · Answer

understated income next year.

Deleted user · Answer

Understated retained earnings this year.

Ahmed kandil · Answer

ANSWER IS d

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