Happy House Corporation Reported Net Sales of $425,000 for the Current

Multiple Choice

Happy House Corporation reported net sales of $425,000 for the current year. After the financial statements had been prepared, it was discovered that ending inventory had been understated by $25,000. If the tax rate is 40%, after the error has been corrected, net income will:

A) never be correct, unless there is a correcting entry.
B) be correct in the present year.
C) not be corrected for two years.
D) be correct in the next year.