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

A. Understated income this year.

B. Understated retained earnings this year.

C. Understated retained earnings next year.

D. Understated income next year

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Question added by Deleted user
Date Posted: 2015/02/13
VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Answer option D. Understated income next year

Lesley Lanag CMA CPA
by Lesley Lanag CMA CPA , Senior Accountant , Takaful Emarat Insurance (P.S.C)

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
by Mohammed Shahid Ullah , Executive Director (Finance) , Coal Power Generation Company Bangladesh Limited

understated income next year.

Understated retained earnings this year.

 

Ahmed kandil
by Ahmed kandil , Cost Controller , Battour Holding Cpompany

ANSWER IS d 

thanks for invitation 

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