An Employee Accidentally Understated the Year's Advertising Expense by $150,000

Multiple Choice

An employee accidentally understated the year's advertising expense by $150,000. Which of the following correctly depicts the effect of this error?

A) Cost of goods manufactured will be overstated by $150,000.
B) Cost of goods sold will be overstated by $150,000.
C) Both cost of goods manufactured and cost of goods sold will be overstated by $150,000.
D) Cost of goods sold will be overstated by $150,000, and cost of goods manufactured will be understated by $150,000.
E) Income will be overstated by $150,000.