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At the End of the Current Year, a Company Failed

Question 115

Multiple Choice

At the end of the current year, a company failed to accrue interest of $500,000 on its investments in municipal bonds. Its tax rate is 30%. As a result of this error, net income is:


A) Unaffected.
B) Understated by $350,000.
C) Understated by $500,000.
D) Understated by $150,000.

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