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

Question 69

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.

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