A Company Uses the Periodic Inventory Method and the Beginning $\begin{array}{ll}\text {\quad\quad Assets }&\text {\quad\quad Equity }\\\end{array}$

Multiple Choice

A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000.The amounts reflected in the current end of the period statement of financial position are
$\begin{array}{ll}\text {\quad\quad Assets }&\text {\quad\quad Equity }\\\end{array}$

A) $\begin{array}{ll}\text { Overstated } & \text { Overstated } \\\end{array}$

B) $\begin{array}{ll}\text { Correct } & \text {\quad\quad Correct } \\\end{array}$

C) $\begin{array}{ll}\text { Understated } & \text { Understated } \\\end{array}$

D) $\begin{array}{ll}\text { Overstated } & \text {\quad Correct }\end{array}$