Exhibit 22-5 Daniel Company, Having a Fiscal Year Ending on December 31

Multiple Choice

Exhibit 22-5
Daniel Company, having a fiscal year ending on December 31, discovered the following errors in 2016:
· A collection of $12,000 from a customer for rent related to January, 2017, was recorded as revenue in 2016.
· Depreciation was understated by $600 in 2016.
· The January 1, 2015, inventory was overstated by $10,000.
· The January 1, 2016, inventory was understated by $6,000.
· Insurance premiums of $2,000 that relate to 2017 were expensed in 2016 when paid. Assume no other errors have occurred and ignore income taxes.
-Refer to Exhibit 22-5. Total assets at December 31, 2016, were

A) overstated by $1,400.
B) overstated by $4,600.
C) understated by $4,600.
D) understated by $1,400.